In its latest note to investors, Goldman Sachs stated its belief that Bitcoin could reach $100K if investors see it as a store of value.
Goldman Sachs, through its recently released note to clients, stated that Bitcoin could reach $100,000 this year.
According to the Global Investment Bank, its forecast largely depends on how investors will treat Bitcoin this year. This means that if investors accept the notion that the flagship cryptocurrency is digital gold, the value of the asset could skyrocket.
Goldman Sachs continued that the float-adjusted market capitalization of Bitcoin is around $700 billion. This represents about 20% of the “store of value” market, dominated by currency and gold.
With the “store of value” market valued at over $2 trillion, Goldman Sachs co-head of global currency strategy Zach Pandl believes Bitcoin could reach $100,000 if its share of the “store of value” ” market rose to 50%.
In your words:
We think that comparing your market capitalization to gold can help set parameters on plausible outcomes for Bitcoin returns.
The research note also admitted that the digital asset industry was not limited to Bitcoin, while also highlighting the fact that Bitcoin “may have applications beyond simply a store of value.”
Goldman Sachs Highlights Bitcoin Energy Use
Talking about Bitcoin’s energy consumption, the Goldman Sachs analyst highlighted that the current energy consumption of the network could make it difficult for institutional investors to adopt it.
One report showed that energy concerns over the currency have not deterred institutional investors who invested more than $6 billion in the asset last year.
However, it is important to note that Bitcoin mining has become a compelling issue among countries looking to reduce their carbon emissions.
In Kazakhstan, for example, protesters are starting to pressure the government for rising electricity bills, which have forced telecom operators to shut down internet services, cutting back on mining companies in the country.
Can Bitcoin Outperform Stocks?
Bloomberg strategist Mike McGlone believes Bitcoin could outperform equities this year, despite the fact that the digital asset started the year on a downtrend.
According to the Bloomberg analyst, the Federal Reserve’s decision to raise interest rates this year could lead to a “win-win scenario for Bitcoin versus the stock market.”
By your statement:
Cryptos are at the top among risky and speculative. If risky assets go down, it helps fight Fed inflation. Becoming a global reserve asset, Bitcoin could be the main beneficiary in this scenario.