Experts believe that money flow will shift from gold to BTC. It could help the price of BTC double to more than $100,000 per coin within the next five
Experts believe that money flow will shift from gold to Bitcoin. That could help the price of Bitcoin double to more than $100,000 per coin within the next five years.

According to CoinMarketCap data on January 6, the Bitcoin price suddenly dropped nearly 8% compared to 24 hours ago to $43,000. The coin's market capitalization shrank to $815 billion.

Thus, compared to the peak of nearly 69,000 USD set on November 10, 2021, Bitcoin price has plummeted 37.48%.

But in a recent report, the Wall Street bank still thinks that the price of Bitcoin will double to more than 100,000 USD within the next 5 years.

“We think the market share of Bitcoin will increase in the coming years. Because digital assets are being adopted more and more widely,” argues Zach Pandl, global head of forex, rates and emerging markets at Goldman Sachs.

Mr. Pandl thinks capital flows from gold will move to Bitcoin. The price of gold currently stands at 1,800 USD/ounce.

Bitcoin will replace gold

According to the expert, Bitcoin currently holds a 20% market share among assets that are considered “stores of value”. It's a term used to refer to assets like gold, Bitcoin, and other alternative assets whose prices, in theory, shouldn't drop much over a long period of time.

Mr. Pandl believes that Bitcoin's market share will increase to 50%. This will help the currency appreciate about 17-18% per year within 5 years to reach 100,000 USD

“We think that comparing the market capitalization between Bitcoin and gold can help give reasonable numbers on Bitcoin's rise,” said an expert at Goldman Sachs.

The world's largest cryptocurrency is growing in popularity among investors. According to Matt Long, Head of Distribution and Brokerage at digital asset platform OSL (Hong Kong), Bitcoin is used as a hedge against inflation and "digital gold".

Mr. Long said it is difficult to predict the price of Bitcoin. However, the value of this coin will increase in the long run. The reason is that investment funds and family offices can spend 0.5-1% of their portfolios on Bitcoin.

Previously, JPMorgan also forecast that the Bitcoin price could increase significantly in the long-term as investment money flows from the gold market to cryptocurrencies.

"Bitcoin's market capitalization will increase 4.6 times, or each Bitcoin is worth $146,000," JPMorgan's strategist group - led by expert Nikolaos Panigirtzoglou - said in a report earlier last year.

However, this process will take time. Once Bitcoin's price movement is similar to that of gold, this market will attract more institutional investors (investment funds, commercial banks, insurance companies...).

"It will take a long time for Bitcoin's price to move similarly to gold. We think this process could take years. That means Bitcoin's $146,000 price target is long-term." Experts explain further.

Controversial

Of course, Bitcoin and other top cryptocurrencies like Ethereum, Binance, Solana have fluctuated wildly since the beginning of 2021 until now. Cryptocurrencies are acting like stocks rather than currencies.

However, an increasing number of top hedge fund managers such as Stanley Druckenmiller, Paul Tudor Jones and George Soros have poured money into Bitcoin.

On the other hand, some other experts believe that Bitcoin will not be able to replace gold. Precious metals have a history of at least 2,500 years, and are accepted and used as a medium of exchange across the globe.

Compared to Bitcoin, the gold market has great depth and liquidity. The total amount of physical gold held by investors and central banks amounts to about $3.7 trillion, 4.5 times the market capitalization of Bitcoin.

"I own gold to hedge against the effects of inflation, as well as a safe-haven asset to cover portfolio losses. Meanwhile, Bitcoin's role is purely speculative." investor Edmund C. Moy said.

Over the past 50 years, gold has held its value during periods of low inflation and surged when inflation is high. Meanwhile, Bitcoin has existed since 2009 and it was not until recently that the market became active. Therefore, according to Mr. Moy, it is too early to say how the value of Bitcoin will increase over time.

Bitcoin's rally over the past two years has been largely driven by a new segment of investors. The cause is a legal school becoming more transparent. Many institutional investors participate in the buying and selling of Bitcoin, including private equity firms, hedge funds, pension funds, and insurance companies.

However, once the initial wave of buying by these funds ends, Bitcoin's rally may no longer be sustainable.
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