The price of Bitcoin may be on the verge of a major breakout to its all-time high, and analysts from Fundstrat, Ark Invest, Standard Chartered, and BlackRock expect it to continue rising in the coming years.
A key theme among most analysts is that Bitcoin (BTC) is the digital version of gold, a safe haven. Like gold, Bitcoin is a scarce resource with high demand, which explains why analysts see it as a store of value.
Bitcoin has been one of the best-performing assets in history, as its price has risen from less than 1 dollar in 2009 to 104,000 dollars today. Its market capitalization has increased to over 2 trillion dollars, a trend that may continue if analysts' estimates are accurate.
The continuous rise in the price of Bitcoin may also lead it to surpass gold in terms of market capitalization over time. Data shows that gold is the most valuable resource globally, with a market capitalization of 22 trillion dollars, while Bitcoin is currently the fifth most valuable.
This performance is remarkable considering that gold has been in use for millennia, while Bitcoin has only been around for about 16 years. As such, all factors being constant, there is a possibility that Bitcoin could surpass gold over time as institutional and sovereign demand increases.
The first phase of the Bitcoin price increase was primarily driven by retail investors, as companies remained skeptical. It has now transitioned to the institutional adoption phase, as companies like Tesla, Coinbase, Strategy, and Block are buying in.
The next phase could see countries begin to buy Bitcoin. El Salvador was the first country to do so, with 6,174 coins worth 640 million dollars. Donald Trump has promoted the idea of a Strategic Reserve of Bitcoin, while some U.S. states are considering the same. More countries like the Czech Republic and Poland are reportedly also thinking about adding BTC to their reserves.
Bitcoin price if its market capitalization matches that of gold
Bitcoin has a market capitalization of 2 trillion dollars, which means it would need to increase by 1,000% to match the 22 trillion dollar valuation of gold.
Based on current circulation, a 1,000% jump would cause the price of Bitcoin to rise to 1,040,000 dollars to match the valuation of gold. This target aligns with predictions from several industry experts.
ARK Invest predicts that the price of Bitcoin will reach 2.4 million dollars by 2030, resulting in a fully diluted market capitalization of 50 trillion dollars. BlackRock's target of 700,000 dollars would value it at 14.7 trillion dollars, while Michael Saylor's mid-term target of 5 million dollars would lead to a valuation of 105 trillion dollars.
