OP you are limiting Bitcoin's potential by thinking it can only be as valuable as gold and therefore only attain a price of $650k.
Bitcoin is much much more useful than Gold. I mean if it wasn't, there wouldn't be much reason for it to exist.
Gold has a little bit of its market value in its use in electronics. Gold has a lot of its market value in jewelry and other uses of it for aesthetic or ceremonial purposes. But I believe most gold is stored in vaults and used simply as a store of value. Bitcoin doesn't have the electronics and aesthetics/ceremonial uses like Gold does, it only has the monetary use. But Bitcoin is orders of magnitude better in its monetary use case than Gold is.
We should therefore expect the value of the bitcoin market to far outstrip gold's value. I would say when Bitcoin's market cap reaches the market cap of Gold that is the BEGINNING of Bitcoin's market starting to mature, not the end. Today Gold is about $13 trillion, I expect Bitcoin to eventually have a market cap of several tens of trillions of dollars in today's dollars. So when accounting for inflation by the time Bitcoin gets to say $50 trillion it'll actually be in the hundreds of trillions of dollars against USD at that time.
Even once Bitcoin is fully mature and is worth several times over what the Gold supply is worth, it should still continue to gain value faster than Gold because Bitcoin is highly useful not just as a store of value but as a currency which is a greater use than just store of value and electronics and aesthetic purposes. Also the fact that Bitcoin is scarcer than Gold will continue to make it the best store of value in the world.
Bitcoin should surpass Gold's value within 10 years, and even at that time Bitcoin will only have captured a fraction of its eventual market.
Topic: BTC vs physical gold price potential - page 6. (Read 616 times)
gold has limits of economics that harm it
if 1 ounce is $2k then 1 gram is $70 ()
there is a peak point were people see no desire in paying more then X per gram for gold becasue the utility is lost after that point.
EG no one will want to buy a phone that costs too many thousands of dollars if gold went too high
however bitcoin doesnt have this problem as much. bitcoin has a kind of 100sat=$1 value limit. but that is far far different to saying if 1btc was $30k then problems arise buying anything below 0.03. bitcoin has many multiples more opportunity before getting to 0.000001
from my view of just very short term market metrics with sone underlying value/cost indicators
gold has a trade window of possibility of $400-$2.6k of its value:premium range
bitcoin is currently in a window of 2 years of $15k- $120k of its value:premium range
bitcoin is at a value low in its range. gold is nearing the top third of premium
i personally see gold being in its "high" era where people would be preparing to sell
i personally see btc being still in its "low" era where people would be continuing to buy
if 1 ounce is $2k then 1 gram is $70 ()
there is a peak point were people see no desire in paying more then X per gram for gold becasue the utility is lost after that point.
EG no one will want to buy a phone that costs too many thousands of dollars if gold went too high
however bitcoin doesnt have this problem as much. bitcoin has a kind of 100sat=$1 value limit. but that is far far different to saying if 1btc was $30k then problems arise buying anything below 0.03. bitcoin has many multiples more opportunity before getting to 0.000001
from my view of just very short term market metrics with sone underlying value/cost indicators
gold has a trade window of possibility of $400-$2.6k of its value:premium range
bitcoin is currently in a window of 2 years of $15k- $120k of its value:premium range
bitcoin is at a value low in its range. gold is nearing the top third of premium
i personally see gold being in its "high" era where people would be preparing to sell
i personally see btc being still in its "low" era where people would be continuing to buy
people buy gold because gold has been the oldest money since. we're attracted to shiny things. we rub it and stroke it and we keep pace.
because the governments had already decided they'd launch CBDC, they will still be talking about USD or EUR despite that CBDC is the same as fiat that can effortlessly print money. they can easily tax BTC with the use of tracking using the CBDC wallet.
This is more of a philosophical debate, but feel free to tell me if my reasoning is wrong.
People often talk about the price potential of BTC or gold, in terms of US dollars or euro. In my opinion this does not make sense because the value of euros and dollars can be destroyed by central banks printing them to infinity.
So it only makes sense to debate the value of BTC or gold, in terms of an other store of value with a limited availability (BTC expressed in gold, or gold expressed in BTC. Or even in silver)
Fiat currency is not a store of value as we all know. Currency is not money because any currency in history got inflated to 0.
There is an estimated 208 000 tonnes (208 000 000 kgs) of gold available on planet earth. This has been mined throughout history and we can assume that this is not lost. But let's estimate it at 210 000 tonnes to make it easy.
The amount of bitcoin that will ever be available, is capped at 21 million coins. So for each coin that is available, there is 10 kgs of gold available (210 million divided by 21 million = 10)
So in terms of value 1 BTC is worth 10kgs of gold. But given that 10kgs of gold costs 650 000 dollars today and 1 BTC costs 30 000, BTC must be undervalued and still has a potential to 20x from here. So why would people buy gold as a hedge against inflation, when they can buy BTC that is undervalued by a factor of at least 20? I guess the answer lies in confidence and previous experience.
Is any of the above wrong?
A few side notes:
- I think this is only true when BTC reaches mass adoption like gold does now. But I think this has a good chance of happening because CBDC's will lose their value just like fiat currency. People will run to real stores of value like precious metals or BTC. BTC is more accessible than gold and so I expect more people to chose BTC over time.
- Given the fact that many coins are lost and thus not available for trading, maybe the real amount of BTC that will ever be in circulation is more like 15 million. This makes BTC more rare and increases its value in gold significantly.
- Sales of gold are already subjected to taxation in nearly every country. I don't know if the government will succeed in taxing BTC. I guess only if BTC needs to get converted to currency, because then the banks and the IRS get involved. But if we can avoid that conversion for payment (directly in BTC), the IRS and the government are bypassed.
If I am wrong about anything here, please tell me.
People often talk about the price potential of BTC or gold, in terms of US dollars or euro. In my opinion this does not make sense because the value of euros and dollars can be destroyed by central banks printing them to infinity.
So it only makes sense to debate the value of BTC or gold, in terms of an other store of value with a limited availability (BTC expressed in gold, or gold expressed in BTC. Or even in silver)
Fiat currency is not a store of value as we all know. Currency is not money because any currency in history got inflated to 0.
There is an estimated 208 000 tonnes (208 000 000 kgs) of gold available on planet earth. This has been mined throughout history and we can assume that this is not lost. But let's estimate it at 210 000 tonnes to make it easy.
The amount of bitcoin that will ever be available, is capped at 21 million coins. So for each coin that is available, there is 10 kgs of gold available (210 million divided by 21 million = 10)
So in terms of value 1 BTC is worth 10kgs of gold. But given that 10kgs of gold costs 650 000 dollars today and 1 BTC costs 30 000, BTC must be undervalued and still has a potential to 20x from here. So why would people buy gold as a hedge against inflation, when they can buy BTC that is undervalued by a factor of at least 20? I guess the answer lies in confidence and previous experience.
Is any of the above wrong?
A few side notes:
- I think this is only true when BTC reaches mass adoption like gold does now. But I think this has a good chance of happening because CBDC's will lose their value just like fiat currency. People will run to real stores of value like precious metals or BTC. BTC is more accessible than gold and so I expect more people to chose BTC over time.
- Given the fact that many coins are lost and thus not available for trading, maybe the real amount of BTC that will ever be in circulation is more like 15 million. This makes BTC more rare and increases its value in gold significantly.
- Sales of gold are already subjected to taxation in nearly every country. I don't know if the government will succeed in taxing BTC. I guess only if BTC needs to get converted to currency, because then the banks and the IRS get involved. But if we can avoid that conversion for payment (directly in BTC), the IRS and the government are bypassed.
If I am wrong about anything here, please tell me.
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