Goldman Sachs Group Inc’s (GS) co-head of foreign exchange strategy Zach Pandl estimates a $100,000 price target for Bitcoin (BITCOMP) if it manages to capture more market share from gold in the coming years.
 

Photo by André François McKenzie on Unsplash

What Happened?

According to a research note seen by CoinDesk, Pandl thinks Bitcoin could take more market share from the precious metal as a byproduct of more adoption, driven by the potential from “Bitcoin-specific scaling solutions.”

“Hypothetically, if Bitcoin’s share of the ‘store of value’ market were to rise to 50% over the next five years (with no growth in overall demand for stores of value) its price would increase to just over $100,000, for a compound annualized return of 17-18% (accounting for growth in Bitcoin supply over time),” Pandl wrote in the note.

Pandl estimates that Bitcoin currently has a 20% share of the “store of value” market, which consists of gold and Bitcoin. The Goldman executive based his estimations on the public holding $2.6 trillion of gold for investment purposes and Bitcoin’s float-adjusted market cap of just under $700 billion.

Why It Matters?

Bitcoin as an alternative store of value to gold is a narrative that has been gained popularity.

Last month, billionaire hedge fund manager Ray Dalio said he had added a small amount of Bitcoin and Ethereum (ETH-X) to his portfolio for diversification purposes.

“It’s [Bitcoin] almost a younger generation’s alternative to gold, and it has no intrinsic value, but it has imputed value, and it has, therefore, some merit,” said Dalio.

Price Action: 

As of Wednesday morning, Bitcoin was trading at $46,385.80, down 0.82% in the last 24 hours.