- Fidelity Digital Assets’ study suggests Bitcoin could eclipse gold in market value, potentially reaching a staggering $676,000 per BTC.
- Large financial institutions, including BlackRock and JPMorgan, are ramping up their involvement in crypto, hinting at an upcoming surge in Bitcoin’s value.
Bitcoin: The Ultimate Store of Value?
Fidelity Digital Assets, the cryptocurrency division of the financial behemoth overseeing $4.5 trillion, recently unveiled a compelling study on Bitcoin, making a strong case for its long-term value. Their findings offer intriguing insights into Bitcoin’s potential trajectory.
A Class Beyond Gold
Among their significant conclusions:
- Bitcoin stands in a unique position as a monetary good and store of value.
- Its value is anchored on being the “most secure, decentralized, and sound digital money.”
- It’s improbable for competitors to enhance upon Bitcoin without making critical compromises.
- Bitcoin, in its scarcity and inflation rate, echoes gold but excels in portability and programmable features.
Drawing inspiration from Satoshi Nakamoto’s original white paper, Fidelity Digital compares Bitcoin‘s growth dynamics to gold. They suggest that just as gold miners invest resources to increase its circulation, Bitcoin relies on computational power and electricity.
Their analysis ends with a bold assertion: Bitcoin not only mirrors but potentially surpasses gold as a store of value.
Could Bitcoin Really Hit $676,000?
The key argument from Fidelity’s team is Bitcoin’s “enforceable scarcity”. They emphasize that Bitcoin’s inflation rate is closely aligned with gold. They note,
“While bitcoin’s current inflation rate is about 1.8%, similar to gold’s, its supply is definitively capped at 21 million.”
Comparatively, gold has an estimated global market cap of around $13 trillion for roughly 205,238 metric tons. Fidelity’s math suggests that if Bitcoin was to eclipse gold’s market capitalization, given the 19 million mined bitcoins, its value might soar to around $676,000 per BTC. This valuation would mark a striking 24-fold increase from its recent price of $28,400.
Additionally, noteworthy moves are taking place in the wider financial landscape. A budding blockchain alliance between colossal financial players, BlackRock and JPMorgan, with $8.5 trillion and $3.8 trillion in assets respectively, indicates that these titans might spark the next significant crypto bull run. Their collaboration, along with other market indicators, signifies that the terrain is fertile for Bitcoin’s explosive growth.
Now, with all these factors converging, the question isn’t whether Bitcoin will rise, but by how much and how quickly.