Your points are clear and I agree with them but let us not forget that global acceptance is also a factor. If people don't accept Bitcoin it is likely impossible.
It's already happening gradually but we do not see it. Bitcoin is already surpassing gold bit by bit since more people are willing to accept Bitcoin to have true value compared to Gold. If Bitcoin could go from 1 trillion to 2 trillion in the next decade then it is possible for the flippening.
Topic: Bitcoin's roadmap towards Gold Flippening - page 2. (Read 256 times)
Bitcoin is seen by many as a potential alternative to gold. But still, Bitcoin's market cap of roughly 800-1400 trillion (in 2024) is about or less than 10% of "the value of all gold in the world".
There was already a thread some months ago about when Bitcoin could reach a market cap similar to gold. Unfortunately, without a poll attached, so I'll attach it to this thread.
In this thread however I want to focus on a slightly different thing: What must happen for Bitcoin to be considered a real competitor for gold by investors?
My theory is that there are a handful of main events which could definitely pave the road towards the gold flippening. Here they are:
1. Bitcoin has to reaffirm its status as the leading cryptocurrency.
"Bitcoin is scarce", they say. One of the weaknesses of this theory however is that in theory an altcoin could claim the same thing. One thing investors will for sure take into account if they consider Bitcoin as a gold alternative is the distance with respect to close contenders. In this case, mainly the distance in market cap versus Ethereum's.
And in this metric Bitcoin has progressed in the recent years and even in the recent months - despite of the Ethereum ETF approval, an ETH/BTC flippening looks more unlikely than ever. Above all in phases of market weakness like in early August. Bitcoin Dominance has increased from 49 to 57% in the recent year (since August 2023), while ETH's decreased from 19% to less than 15%.
Status: On track, almost done
2. Bitcoin's supply inflation has to be lower than gold's.
In the current 2024-28 halving period, Bitcoin's supply has a yearly inflation of 0.83 % roughly (19.7 milllion BTC are circulating vs. ~164360 BTC mined each year). Gold production had been around 3000 metric tons in 2023. Current available gold is estimated at 210000 metric tons (most recent confirmed estimations from 2017 are about 190000). This means a "gold supply inflation" of 1.4% per year.
In short: Since the current halving period, Bitcoin is less inflationary than gold. The difference (0.83% vs 1.4%) could even be larger, because some Bitcoins are lost each year, while for gold this is quite unlikely.
Status: Done
3. Bitcoin's volatility has to approach gold's
One of Bitcoin's biggest problems are the sharp price swings. Investors considering BTC an alternative for gold may fear the deep crashes we see each couple of years, sometimes tied to some news events, like in 2022, but sometimes also coming out of nowhere and probably caused by massive cyclic profit taking, like in 2018.
60-day volatility is currently at around 2.5 to 3 %. This is way superior than gold's around 1% (chart is available at the Bitbo site, too). There's however good news: Bitcoin's volatility is declining, while gold's is quite stable (yellow=BTC, orange=gold). And there was a moment in later 2023 where both were already quite close (Bitcoin 1.9%, Gold 1.4%):
Status: Improving, but still some way to go
What do you think? Do you agree on these points? There are items some other people may consider important, like acceptance by institutional investors, and even Bitcoin being hold by governments, but I'm more skeptic towards these indicators.
There was already a thread some months ago about when Bitcoin could reach a market cap similar to gold. Unfortunately, without a poll attached, so I'll attach it to this thread.
In this thread however I want to focus on a slightly different thing: What must happen for Bitcoin to be considered a real competitor for gold by investors?
My theory is that there are a handful of main events which could definitely pave the road towards the gold flippening. Here they are:
1. Bitcoin has to reaffirm its status as the leading cryptocurrency.
"Bitcoin is scarce", they say. One of the weaknesses of this theory however is that in theory an altcoin could claim the same thing. One thing investors will for sure take into account if they consider Bitcoin as a gold alternative is the distance with respect to close contenders. In this case, mainly the distance in market cap versus Ethereum's.
And in this metric Bitcoin has progressed in the recent years and even in the recent months - despite of the Ethereum ETF approval, an ETH/BTC flippening looks more unlikely than ever. Above all in phases of market weakness like in early August. Bitcoin Dominance has increased from 49 to 57% in the recent year (since August 2023), while ETH's decreased from 19% to less than 15%.
Status: On track, almost done
2. Bitcoin's supply inflation has to be lower than gold's.
In the current 2024-28 halving period, Bitcoin's supply has a yearly inflation of 0.83 % roughly (19.7 milllion BTC are circulating vs. ~164360 BTC mined each year). Gold production had been around 3000 metric tons in 2023. Current available gold is estimated at 210000 metric tons (most recent confirmed estimations from 2017 are about 190000). This means a "gold supply inflation" of 1.4% per year.
In short: Since the current halving period, Bitcoin is less inflationary than gold. The difference (0.83% vs 1.4%) could even be larger, because some Bitcoins are lost each year, while for gold this is quite unlikely.
Status: Done
3. Bitcoin's volatility has to approach gold's
One of Bitcoin's biggest problems are the sharp price swings. Investors considering BTC an alternative for gold may fear the deep crashes we see each couple of years, sometimes tied to some news events, like in 2022, but sometimes also coming out of nowhere and probably caused by massive cyclic profit taking, like in 2018.
60-day volatility is currently at around 2.5 to 3 %. This is way superior than gold's around 1% (chart is available at the Bitbo site, too). There's however good news: Bitcoin's volatility is declining, while gold's is quite stable (yellow=BTC, orange=gold). And there was a moment in later 2023 where both were already quite close (Bitcoin 1.9%, Gold 1.4%):
Status: Improving, but still some way to go
What do you think? Do you agree on these points? There are items some other people may consider important, like acceptance by institutional investors, and even Bitcoin being hold by governments, but I'm more skeptic towards these indicators.
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