Analysts say the smaller market size of Bitcoin means even a minimal shift could send it flying, unlike gold’s larger, more stable market.
The rivalry between Bitcoin and traditional assets, particularly gold, has escalated over the years. Despite Bitcoin’s continuous growth, its market size remains much smaller compared to gold.
Notably, a recent analysis sheds light on this disparity, highlighting gold’s massive growth and the potential for Bitcoin as the market matures. Amid Bitcoin’s rapid rise, the market still faces significant room for expansion.
Gold’s Massive Growth in a Single Day
According to crypto market watcher Belle, gold’s market continues to impress, with a notable $1 trillion increase in its market capitalization in just one day. Per the analyst, this is nearly the entire value of Bitcoin. The market cap of gold now stands at approximately $22.535 trillion, proving its depth and liquidity.
This significant gain underlines the immense scale of traditional asset markets, especially compared to newer markets like Bitcoin. The addition of $1 trillion to gold’s market cap represents a large portion of its total value, showing just how much larger and more stable these traditional assets are.
Meanwhile, Bitcoin’s market cap currently sits at around $1.667 trillion. This figure shows the substantial size difference between gold and Bitcoin.
Due to Bitcoin’s smaller market, even a relatively small shift in its market cap could lead to significant price surges, presenting more gains for investors than what gold would offer.
For instance, if $1 trillion were added to Bitcoin’s market cap, it could push its price from around $84,000 to as high as $135,000, setting a new all-time high and surging over 60%.
The Potential for Bitcoin’s Growth
This is not the only analyst drawing comparisons between gold and Bitcoin in recent discussions. Another watcher, Stack Hodler, recently pointed out the growing interest in assets like Bitcoin and gold. According to Hodler, investors are fleeing to these assets as global sovereign debt crises unfold.
He noted that gold has added $9.2 trillion to its market cap in the past 14 months. However, Bitcoin, as the ultimate scarce asset, presents an attractive alternative due to its unique features, including its finite supply, divisibility, and ease of global transfer.
This growing appeal suggests that Bitcoin could eventually capture a significant portion of the capital that currently flows into gold. Hodler argues that as more global equity and bond portfolios allocate funds to Bitcoin, its price could surge dramatically.
If $9 trillion were added to Bitcoin’s market cap, the price per coin would rise to $518,000, with the potential to hit $1 million per coin in the future.
Bitcoin’s Role in Corporate and Government Treasuries
Elsewhere, industry expert Timothy Kotzman believes that Bitcoin could play a larger role in corporate and government treasuries in the coming years. According to Kotzman, Bitcoin’s rise is not merely a passing trend but a shift in how the world views wealth storage and management.
He compares Bitcoin to a “monkey bar” positioned between gold and artificial intelligence. While gold has been a trusted store of value for centuries, Bitcoin’s performance and evolving role in the financial world suggest it is becoming increasingly influential.
Notably, Kotzman emphasized that Bitcoin is outperforming traditional markets in some areas, signaling its growing importance. Despite this, gold remains the dominant asset in legacy finance, continuing to offer stability and security in times of uncertainty.
Source: The Crypto Basic / Digpu NewsTex