Wednesday 05 January 2022 2:27 pm

Goldman Sachs predicts Bitcoin could hit $100k in next five years

Goldman Sachs analysts have said Bitcoin’s price could hit $100k in the next five years as crypto surpasses gold as a store of value investment.

Global investment bank Goldman Sachs has predicted that Bitcoin’s price could hit $100k (£73.8k) if the asset surpasses gold as a store of value.

In a trading note sent to clients earlier this week, foreign exchange analysts at Goldmans said bitcoin could hit the milestone in the next five years as investors turn from gold to crypto as a “store of value.”

Analysts pointed out that worldwide the public owns approximately $2.6tn of gold for investment purposes while Bitcoin, which has a market capitalisation of $700bn, makes up 20 per cent of the store of value market.

“We think that Bitcoin’s market share will most likely rise over time as a byproduct of broader adoption of digital assets,” the analysts wrote.

“If Bitcoin’s share of the ‘store of value’ market were to rise to 50 per cent over the next five years (with no growth in overall demand for
stores of value) its price would increase to just over $100k, for a compound annualized return of 17-18 per cent (accounting for growth in Bitcoin supply over time),” the Goldman Sachs note continued.

Analysts at Goldman Sachs said that scaling solutions, which allow the Bitcoin network to process large volumes of transactions at speed, could allow the world’s most famous crypto currency to win market share from gold.

“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,” the analysts added.

The world’s oldest crypto currency hit a new all time high above $69k in November 2021. Price is down one per cent in the past 24 hours with BTC trading at $46,411 at press time.