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Goldman Sachs says bitcoin will compete with gold as "store of value"

Stock MarketsJan 05, 2022 12:47PM ET

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Goldman Sachs says bitcoin will compete with gold as

© Reuters. FILE PHOTO: A representation of the virtual cryptocurrency Bitcoin is seen in this picture illustration taken October 19, 2021. REUTERS/Edgar Su

LONDON (Reuters) - Bitcoin will take market share away from gold in 2022 as digital assets become more widely adopted, Goldman Sachs (NYSE:GS) analyst Zach Pandl said in a research note to clients.

Citing bitcoin's $700 billion market capitalization, compared to the 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.

Bitcoin will "most likely" become a bigger proportion over time, Goldman Sachs said, in a list of 2022 predictions.

In a hypothetical scenario in which bitcoin grabs a 50% share of this market, its price would reach just over $100,000, the note said.

Bitcoin was trading around $46,073 on Wednesday, having struggled to make gains after falling sharply in early December. In November, it had hit an all-time high of $69,000.

"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.

The term "store of value" usually describes assets which can maintain their worth over time without depreciating, such as precious metals or some currencies.

Goldman Sachs restarted its cryptocurrency trading desk in 2021.

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Comments (6)

Alan Rice Jan 05, 2022 2:51PM ET

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Caesars and Goldman Sachs Financial: 2022 merger ??

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Spirit and Truth Jan 05, 2022 10:47AM ET

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bitcoin ain't going away. And there's still money to be made on the pumps and the dumps are just holiday sales

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Amy Carbob Jan 05, 2022 10:21AM ET

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Goldman hust wants you to pump their bags so they can dump

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A_Jaundiced_Eye Jan 05, 2022 9:44AM ET

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Wake me when I can bury Bitcoins in my back yard.

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Edward Chong Jan 05, 2022 8:13AM ET

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if u listen to Goldman. sure will be a millionaire. cheers !!!

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James White Jan 05, 2022 8:09AM ET

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pump n dump

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