Bitcoin potential as % of gold market

Bitcoin potential as % of gold market


On Coin Bureau's YouTube channel, I saw a recap of an interesting crypto report put out by Bank of America.  The report was put out on October 4th and was entitled Digital Assets Primer:  Only the first inning. 

Most of what I read would be considered old news to regular readers on this forum but I did see a few interesting bits.  One was looking at the price of Bitcoin assuming it grew to become a store of value like gold.  The chart below shows what they estimate the price to be as a % of the gold market captured.  Of note, they point out that this does not assume BTC replaces gold, but rather comes alongside as an additional store of value vehicle.  Below the chart I pasted their description of the analysis. 

That got me to thinking:  How much demand is there for another store of value?  For a trustworthy vehicle who's price is difficult to manipulate, it could be quite large given how hot the printing presses are getting.  Some food for thought.

As always, this is not investment advice.

Cheers,

NZFX

 

31effece42188618d7587ac6e2a255fe1608aa29c0bd74cfd5454a8912c02705.jpg

We think bitcoin is more similar to gold in that it can be viewed as a potential store of value, especially when markets lose faith in fiat currencies. Bitcoin and gold share many similar properties: limited supply, price driven by supply and demand and must be extracted/mined. Bitcoin and gold are also both viewed as stores of value, which allows us to use a Total Addressable Market (TAM) approach to model the price of one bitcoin assuming various market capture scenarios (Exhibit 46 & Exhibit 47). Note that this analysis does not assume bitcoin replaces gold as a store of value, but rather creates a store of value market in addition to the gold market. Whether there is demand for a store of value market in addition to the gold market remains to be seen, but readers should remember that gold is not the only store of value. Art, offshore assets, real estate and other commodities exemplify additional store of value markets.

How do you rate this article?


33

0

NZFX
NZFX

Pursuing interesting conversations that help lead to truth. Twitter: @NZFX6


From skeptic to hodlr to investor
From skeptic to hodlr to investor

A 20 year institutional investor learning about the crypto space.

Send a $0.01 microtip in crypto to the author, and earn yourself as you read!

20% to author / 80% to me.
We pay the tips from our rewards pool.