How much can Bitcoin become worth?

We published an article on Saturday where we compared Bitcoin and gold. If you haven’t read that article, please do so, because this one builds on that. The main conclusion from the article is that Bitcoin is primarily a more efficient store of value is then gold. Bitcoin has lower inflation, is cheaper to transport, faster, has lower storage costs and is easier to check for authenticity.

That is all well and good, of course, but what does this mean for the value of Bitcoin? What exactly can Bitcoin become worth?

Valuing Bitcoin based on gold

To determine how much Bitcoin can actually be worth, we will make a few simple calculations in this article. Please note that these are really beer mat calculations and do not attach too much importance to them. We are going to value Bitcoin against gold in this section of the text.

Earlier we established that Bitcoin is a more efficient means of storing your value. In theory, that would mean that Bitcoin has the potential to approach the market value of gold.

The above image, which comes from the Clarkmoody websitetells us that Bitcoin’s current market cap of $428.1 billion represents about 3.55 percent of gold’s market value.

If Bitcoin manages to level up with gold, that would mean it has a market cap of about $12.06 trillion. You get to that number by putting – (1/0.035) * $428.1 billion – in a calculator. With that market cap you would end up with a Bitcoin price of $ 624,507. That is of course not bad at all for an asset that you can currently buy for $ 22,145 each.

Read Also:  Where To Get Free Copies Of Your Credit Reports

Don’t count yourself rich

However, it is important not to count yourself rich right away. Ultimately, it remains to be seen whether Bitcoin has what it takes to match gold’s market cap. After all, gold can boast a history of thousands of years of success, while Bitcoin has to make do with just under 14 years. Before Western central banks even think about buying a bit of Bitcoin, Bitcoin may need years and years of development.

So it is far from certain that Bitcoin can tap that bizarre price of more than $ 600,000, but it is certainly nice to dream sometimes. Satoshi Nakamoto probably did not expect the digital currency to come as far as it has today. In that respect, it is already a more than exceptional achievement.

Recent Articles

Related News

Leave A Reply

Please enter your comment!
Please enter your name here