Ever since Bitcoin started heading towards a designation of Digital Gold, it has been compared with the yellow precious metal as an investable asset. Many think that gold, as an asset, is outdated and slow moving, and Bitcoin is the answer.
But, in reality, Bitcoin’s $130 billion market cap pales in comparison with gold, and gold is still very much the preferred asset for most investors, both individual and institutional. However, Bitcoin has been the better performing asset over the last decade, in fact, it has barley been bested by anything these last 10 years.
So, even though Bitcoin is a brilliantly performing asset, it has still struggled to wrestle away the momentum from more traditional investibles, such as gold, but the feeling is that it soon could. In a discussion on CNBC, a number of Bitcoin believers are in agreement that Bitcoin can start cutting into Gold’s market share.
As is often the case when Bitcoin maximalists get into a room, there was much discussion about the predicted price of Bitocin in the mid to long term future. The likes of Brian Kelly and Tom Lee, were in agreement with Tim Draper’s belief that $250,000 per Bitcoin is not off the cards.
The analysts were looking at the price chanel that Bitcoin maintained since 2013 and surmised that it was reasonably possible that the impressive price tag could be hit in the mid-term. More so, they also argued that if the coin was to start climbing to these levels, Gold could be in danger.
In fact, if Bitcoin did price at a quarter of a million dollars per coin, it would mean the market cap would amount to 50 percent of what Gold is – $4.5 trillion dollars.
“I think Tim Draper thinks — and I certainly have some of his views — that Bitcoin is going to take market share from Gold,” Kelly added.
Some will argue that gold investors have switched over to Bitcoin, but even if this is true, it is a drop in the bucket. Investors in gold outweigh Bitcoin investors heavily as gold has cracked the institutional market and is vital to governments and other major investors.
But, if Bitcoin can reach the impressive $250,000 price tag in the near future, there would be a lot of hype and substance behind investing in the coin. Surely then, with the slow institutional uptake already happening, many would be happy to switch their gold reserves for Bitcoin?