Goldman Sachs predicts Bitcoin could reach $100,000 and rival gold as store of value

Bitcoin will take market share away from gold in 2022 as digital assets become more widely adopted, Zach Pandl, the co-head of global foreign exchange, rates, and emerging market strategy for Goldman Sachs, said in a research note to clients.

“We think that Bitcoin’s market share will most likely rise over time as a byproduct of broader adoption of digital assets,” Pandl said in the report.

Citing Bitcoin’s $700 billion market capitalization, compared to around $2.6 trillion worth of gold owned as an investment, Goldman Sachs said that the cryptocurrency currently has a 20% share of the store of value market, according to Reuters.

Amid 2022 predictions, Goldman Sachs said Bitcoin will most likely become a more significant proportion over time.

In a hypothetical scenario in which Bitcoin captures a 50% share of this market, its price will rise about 17% to 18% higher annually for the next five years and reach just over $100,000, the note states.

“Bitcoin may have applications beyond simply a ‘store of value,’ and digital asset markets are much bigger than Bitcoin, but we think that comparing its market capitalization to gold can help put parameters on plausible outcomes for Bitcoin returns,” Pandl wrote.

‘Store of value’ usually describes assets that can maintain their worth over time without depreciating, such as precious metals or some currencies.

However, Bitcoin and other top cryptos such as Ethereum, Binance, Solana and meme tokens like Dogecoin and Shiba Inu have been extremely volatile in the past year. As a result, cryptos are behaving more like stocks than currencies at this point.

Over the last few days, prices of Bitcoin and other cryptocurrencies are continuing their slide along with the stock market, as market analysts expect that the US Federal Reserve will raise interest rates soon to fight inflation. As a result, Bitcoin has slumped over 17% since December 27.

Still, an increasing number of top fund managers including Stanley Druckenmiller, Paul Tudor Jones and George Soros have invested in Bitcoin. Regulators have approved exchange-traded funds (ETFs) that track Bitcoin futures prices too, making it even easier for individual investors to dive in.