Bitcoin has the potential to cross the $100,000 milestone in the coming years if investors increasingly treat the leading cryptocurrency as a store of value, according to a recent note from Goldman Sachs.
Goldman Sachs estimated that bitcoin comprises approximately 20 percent of the “store of value” market, which traditionally refers to assets such as gold that maintain their value without significant depreciation.
Analyst Zach Pandl said bitcoin’s “market share will most likely rise over time” as investors grow more comfortable with digital assets.
Pandl, the firm’s co-head of global foreign exchange and emerging market strategy, noted bitcoin’s value would reach $100,000 within a few years if its share of the store of value market were to “hypothetically” reach 50 percent.
“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 said, according to Reuters.
Crypto proponents have long touted bitcoin as “digital gold” and a potential successor to the precious metal. The price of gold is currently about $1,800 per ounce.
The price of a single bitcoin surged as high as $69,000 in November. But cryptocurrency values have slumped in recent weeks as rising inflation and other concerns spook investors.
Bitcoin fell more than 6 percent to $43,283 as of Thursday afternoon. The latest downturn occurred after the Federal Reserve’s December FOMC minutes indicated officials could raise interest rates faster than expected this year.
Despite the recent slump, bitcoin’s value has increased more than 17 percent over the last 12 months.