it is very difficult to speculate this issue because it is very sensitive in my opinion there will be many views between gold and btc owners,
In my opinion, one day Bitcoin will definitely exceed market capacity, because as we know, the value of Bitcoin is getting better every day than gold, but for now we don't need to think about that, now the main thing is how to collect as much BTC as possible and save it, for now. - next session in bitcoin
Topic: When will Bitcoin catch up with Gold in capitalization? - page 5. (Read 1209 times)
Gold is currently at about $13.5 trillion. Bitcoin is just under a trillion. Yes it'll happen, but it'll take awhile.
Bitcoin supply is currently 19.6+ million. Since it will take a while to catch Gold, let's just use a future supply of 20.8 million for this calculation. So let's say it there will roughly be 20.8 million bitcoin when it catches Gold. It'll hit 20.8 million in 2035 but I'm just using that supply as a rough estimate.
Gold current value $13.5 trillion divided by 20.8 million bitcoin = ~$650k
Based on that number I would guess the 2036/37 bull run (assuming the four year market cycle hasn't largely faded away by then) would see Bitcoin passing $650k and $13.5 trillion.
But of course, Gold's market cap will likely grow during the next dozen years.
About 1.5% of the total Gold supply is mined on average on an annual basis so per decade there is about 16% growth in Gold supply. And additionally on top of that the price of Gold is likely to continue to go up over the long term by at least a few percent annually on average. So if we think Bitcoin will hit $650k by the end of 2036 (remember halvings are slightly less than four years so if 4 year boom/bust market cycle still exists at that point the halving is gonna be in 2035 and bull run would likely be in 2036, not 2037), well even if Gold's price doesn't move it's supply will increase by about 21% in the next 13 years, putting it at about $16.3 trillion. Now let's add in 13 years of growth let's just assume 4% annual price appreciation and that puts Gold at a market cap of about $27 trillion! Double what it is today!
That means while Bitcoin might pass $13.5 trillion market cap in 2036, it'll still only be half of Gold's market cap. Must better than the <1/13th it is today, but still far off. So it could very well. $27 trillion market cap for the entire 21 million bitcoin would be $1.285 million price for Bitcoin. I would expect Bitcoin to hit that in the 2040s, perhaps in the first half of that decade, but of course Gold should be a bit higher than that by then. So I think it's likely we should expect Bitcoin to not actually pass Gold and become the most valuable single asset on the planet until the late 2040's. I'll go ahead and say by 2050 Bitcoin will have surpassed Gold, and when it'll probably take a price of around $2 million for bitcoin to do it.
Of course if Gold price increases faster than 4%/year, or if it increases more slowly, like say because Bitcoin is eating Gold's use case as the world's primary store of value, then the ultimate flippening could happen well before or well after 2050. For example, in 2049, after 25 years of growth (given 1.5% annual Gold supply increases), if Gold's price increased by 3% annually it will have reached about $41T, but 4% would be $52T, 5% would be $66T. The difference between those on Bitcoin's price would be $1.95 million, $2.476 million, and $3.14 million. And obviously those three prices like represent a decent span of years for Bitcoin. Compounding growth over many years is pretty crazy! So Gold's growth from here on out will have a big effect on how many years it takes Bitcoin to catch it.
Honestly I assumed it would happen in the 2030s, but after writing this up I realize I never accounted for Gold's own growth before, so the Gold flippening won't happen for much longer than I had previous assumed.
One thing that could accelerate Bitcoin's growth and allow it to pass Gold significantly sooner is if at some point in the next 20 years major nations start treating Bitcoin like Gold and hold it as part of their national reserves. Especially if they sell some Gold to replace it with Bitcoin, thus also putting sell pressure on Gold. Nations could easily buy up hundreds of thousands of Bitcoin even when prices are well into the six digits if they decide to future proof their reserves by going with a Gold + Digital Gold mix instead of just Gold.
But 2050 sounds about right to me, without having to try to guess about potential events that totally change the long term trajectory of Bitcoin or Gold's price.
Bitcoin supply is currently 19.6+ million. Since it will take a while to catch Gold, let's just use a future supply of 20.8 million for this calculation. So let's say it there will roughly be 20.8 million bitcoin when it catches Gold. It'll hit 20.8 million in 2035 but I'm just using that supply as a rough estimate.
Gold current value $13.5 trillion divided by 20.8 million bitcoin = ~$650k
Based on that number I would guess the 2036/37 bull run (assuming the four year market cycle hasn't largely faded away by then) would see Bitcoin passing $650k and $13.5 trillion.
But of course, Gold's market cap will likely grow during the next dozen years.
About 1.5% of the total Gold supply is mined on average on an annual basis so per decade there is about 16% growth in Gold supply. And additionally on top of that the price of Gold is likely to continue to go up over the long term by at least a few percent annually on average. So if we think Bitcoin will hit $650k by the end of 2036 (remember halvings are slightly less than four years so if 4 year boom/bust market cycle still exists at that point the halving is gonna be in 2035 and bull run would likely be in 2036, not 2037), well even if Gold's price doesn't move it's supply will increase by about 21% in the next 13 years, putting it at about $16.3 trillion. Now let's add in 13 years of growth let's just assume 4% annual price appreciation and that puts Gold at a market cap of about $27 trillion! Double what it is today!
That means while Bitcoin might pass $13.5 trillion market cap in 2036, it'll still only be half of Gold's market cap. Must better than the <1/13th it is today, but still far off. So it could very well. $27 trillion market cap for the entire 21 million bitcoin would be $1.285 million price for Bitcoin. I would expect Bitcoin to hit that in the 2040s, perhaps in the first half of that decade, but of course Gold should be a bit higher than that by then. So I think it's likely we should expect Bitcoin to not actually pass Gold and become the most valuable single asset on the planet until the late 2040's. I'll go ahead and say by 2050 Bitcoin will have surpassed Gold, and when it'll probably take a price of around $2 million for bitcoin to do it.
Of course if Gold price increases faster than 4%/year, or if it increases more slowly, like say because Bitcoin is eating Gold's use case as the world's primary store of value, then the ultimate flippening could happen well before or well after 2050. For example, in 2049, after 25 years of growth (given 1.5% annual Gold supply increases), if Gold's price increased by 3% annually it will have reached about $41T, but 4% would be $52T, 5% would be $66T. The difference between those on Bitcoin's price would be $1.95 million, $2.476 million, and $3.14 million. And obviously those three prices like represent a decent span of years for Bitcoin. Compounding growth over many years is pretty crazy! So Gold's growth from here on out will have a big effect on how many years it takes Bitcoin to catch it.
Honestly I assumed it would happen in the 2030s, but after writing this up I realize I never accounted for Gold's own growth before, so the Gold flippening won't happen for much longer than I had previous assumed.
One thing that could accelerate Bitcoin's growth and allow it to pass Gold significantly sooner is if at some point in the next 20 years major nations start treating Bitcoin like Gold and hold it as part of their national reserves. Especially if they sell some Gold to replace it with Bitcoin, thus also putting sell pressure on Gold. Nations could easily buy up hundreds of thousands of Bitcoin even when prices are well into the six digits if they decide to future proof their reserves by going with a Gold + Digital Gold mix instead of just Gold.
But 2050 sounds about right to me, without having to try to guess about potential events that totally change the long term trajectory of Bitcoin or Gold's price.
I want to know your opinion:
- Do you think Bitcoin has any chance of catching up and then surpassing Gold in capitalization?
- If so, when in the future might that event take place?
- If this happens, will it be a good thing for Bitcoin?
Yes of course it has a chance, once people realise that it's easier to store and easier to transact with it, compared with gold.
But, of course, central banks own a lot of gold, so they have a huge impact on the market. Give it some time and eventually, my opinion is that Bitcoin will surpass gold's capitalization.
I don't think it is so important though. What's more important is to realise that Bitcoin is freedom, in a sense that it allows us to ditch the central banking system that rules the markets. It allows us to transact P2P without needing any authority to act as an intermediary. Bitcoin is a tool, just like cash is a tool. There is no need to speculate. As long as I can buy the same product using the same amount of bitcoin, paying P2P, I am good!
Bitcoin, used as Bitcoin, is better than Bitcoin that can be exchanged for higher amounts of FIAT. That's my opinion of course.
Bitcoin's meteoric rise has sparked comparisons to gold, particularly as a hedge against inflation[1]. Some even envision it supplanting the precious metal as the ultimate store of value[2]. However, the path to surpassing gold's market cap of $13.47 trillion remains shrouded in uncertainty[3-4].
Currently, Bitcoin stands at just 7.1% of that value, requiring a 14-fold increase to bridge the gap and reach $678,000 per unit. While optimists like PlanB predicted a $500,000 price point[5], even that falls short of dethroning gold.
Historical trends paint a complex picture. While Bitcoin's price momentum seems to be waning compared to traditional indices like the DJIA, it's unclear if this deceleration will persist. Assuming current growth rates, 2028 is the earliest possible date for Bitcoin to reach gold's valuation. However, factoring in potential gold price inflation due to uncontrollable economic factors, the timeline could stretch to 2035-2040.
But surpassing gold might not be the ultimate victory. An exorbitant price could hinder Bitcoin's utility as a payment method, relegating it to government reserves. Perhaps a more achievable and beneficial goal lies in surpassing larger corporations like Microsoft ($3.026 trillion), placing Bitcoin's value at a more accessible $154,000 per unit.
I want to know your opinion:
References:
[1] GrayScale: October 2023: Rising demand for Bitcoin as Digital Gold
[2] ‘The Bitcoin Standard’: A review
[3] Gold vs. Bitcoin: Which Is Better?
[4] Top Assets by Market Cap
[5] Bitcoin Will be Scarcer Than Gold After Halving, $500K BTC Price Predicted
Currently, Bitcoin stands at just 7.1% of that value, requiring a 14-fold increase to bridge the gap and reach $678,000 per unit. While optimists like PlanB predicted a $500,000 price point[5], even that falls short of dethroning gold.
Historical trends paint a complex picture. While Bitcoin's price momentum seems to be waning compared to traditional indices like the DJIA, it's unclear if this deceleration will persist. Assuming current growth rates, 2028 is the earliest possible date for Bitcoin to reach gold's valuation. However, factoring in potential gold price inflation due to uncontrollable economic factors, the timeline could stretch to 2035-2040.
But surpassing gold might not be the ultimate victory. An exorbitant price could hinder Bitcoin's utility as a payment method, relegating it to government reserves. Perhaps a more achievable and beneficial goal lies in surpassing larger corporations like Microsoft ($3.026 trillion), placing Bitcoin's value at a more accessible $154,000 per unit.
I want to know your opinion:
- Do you think Bitcoin has any chance of catching up and then surpassing Gold in capitalization?
- If so, when in the future might that event take place?
- If this happens, will it be a good thing for Bitcoin?
References:
[1] GrayScale: October 2023: Rising demand for Bitcoin as Digital Gold
[2] ‘The Bitcoin Standard’: A review
[3] Gold vs. Bitcoin: Which Is Better?
[4] Top Assets by Market Cap
[5] Bitcoin Will be Scarcer Than Gold After Halving, $500K BTC Price Predicted
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