Bitcoin $100K possible by chipping away at gold’s market share: Goldman Sachs

Bitcoin (BTC) failed to close 2021 above the long-anticipated $100,000 level, but experts believe that the psychological horizon is still achievable by capturing gold’s market share, albeit over a longer period.

In a note issued to investors on Tuesday, Zach Bundle, co-head of FX and global markets strategy at Goldman Sachs, hypothesized that if the largest cryptocurrency could exceed 50% of the market share value of a store over the next five years, the price of BTC would rise to over Just under $100,000, which represents an 18% compound annual return.

While the current market capitalization of BTC is close to $884 billion, Goldman Sachs estimates the adjusted market value of Bitcoin floating at less than $700 billion, which is one-fifth of the “store of value” market. The said market is uncrowded, though. The only other participant in the Goldman Marketplace of Value is gold, with available investments amounting to $2.6 trillion.

Despite its ups and downs, Bitcoin still managed to outperform Goldman Sachs’ 2021 scorecard with annual returns of over 60%. Gold is placed at the bottom of the same chart with an annual loss of 4%.

Return the annual scorecard. Source: Goldman Sachs Global Investment Research

Related: Wait and Watch Approach: 3/4 of Bitcoin’s Supply Now Illiquid

Goldman Sachs experts believe that demand for BTC will not be affected by the heated debate surrounding the energy consumption of the Bitcoin network. While a recent study claims that the Bitcoin ecosystem consumes eight times the energy of Google and Facebook combined, the New York Digital Investment Group estimates that Bitcoin mining will account for no more than 0.4% of global electricity consumption over the next decade.

As detailed in the Cointelegraph New Year Special, Bitcoin has had a bumpy ride over the past year. Many experts believe that $100,000 was an easy target for the major cryptocurrency for 2021. However, BTC closed the year around $47,000 after touching an all-time high of $69,000 in November, without achieving the analysts’ ambitious target.