US multinational investment bank Goldman Sachs has highlighted a scenario in which bitcoin hits the oft-touted price milestone of $ 100,000. To reach this price point, the institutional adoption of the main cryptocurrency must increase significantly and overtake gold.
Goldman Sachs Joins The $100K Club
The Wall Street behemoth has displayed a controversial approach to the cryptocurrency space over the years. It seems like its ever-changing view is influenced by the momentary situation of the digital asset industry.
Amid parabolic price increases for most tokens in 2017, Goldman Sachs has promised to launch a crypto trading desk. After the year-long bear market in 2018, however, the company ended the initiative.
Last year, the investment bank continued with its dubious views, jumping from supporting the cryptocurrency industry to claiming that bitcoin is not a substitute for gold but copper.
However, the main digital asset marked a 60% price increase in 2021, and now Goldman Sachs has once again taken a step back on the optimistic side. According to Zach Pandl – Co-Head of Global FX and EM Strategy – if BTC continues to gain market share in gold as part of its wider adoption, it could more than double its price over the next five years:
“If bitcoin’s share of the store of value market were “hypothetically” to rise to 50 percent over the next five years, its price would increase to just over $US100,000, for a compound annualized return of 17 percent or 18 percent.”
The executive estimated that at present, Bitcoin’s float-adjusted market capitalization is just under $ 700 billion, which represents about a 20% share of the “reserve” market. value ”(gold and Bitcoin). At the same time, the value of the precious metal available for investment is estimated at $ 2.6 trillion.
Is $100K Coming This Year?
Another prominent figure who envisioned this price tag for bitcoin is Antoni Trenchev – Co-Founder of the cryptocurrency lending platform Nexo. In his view, BTC is an inflation hedge equal to gold which, combined with the rising institutional adoption towards the asset, could drive its price towards $100K by the middle of 2022.
Nayib Bukele – the president of El Salvador – has also expressed optimistic crypto predictions for the current year. Bitcoin could hit the milestone in the next 12 months, according to the leader, while at least two more countries follow his country’s lead and adopt the primary digital asset as legal tender.
