Bitcoin has long been referred to as “digital gold.” In what would likely amount to good news for the cryptocurrency and related spot ETFs launched in January, at least one expert believes bitcoin could eventually wrest market share from the yellow metal.
In a recent post on X (formerly Twitter), Jurrien Timmer, global head of macro at Fidelity, citing World Gold Council data, estimated “the share of monetary gold is around 40% of total above-ground gold.”
“I estimate that Bitcoin will eventually capture around a quarter of the monetary gold market. At 40%, monetary gold is currently worth around $6 trillion, while Bitcoin is worth $1 trillion,” he observed.
Bitcoin getting to 25% of the market capitalization of gold, or $1.5 trillion implies a rise to $76,000. That’s well beyond the late-Tuesday price of around $57,180, and noticeably above the all-time high of around $69,000.
More on the Bitcoin/Gold Comparison
Critics often assert gold has been used as currency for thousands of years. That renders the comparison with bitcoin moot, because the latter isn’t even 20 years old. Conversely, bitcoin bulls believe the digital currency warrants comparisons with the yellow metal because its supply is limited. In fact, bitcoin’s supply is fixed at 21 million tokens. Gold’s supply, though limited, isn’t set at a hard and fast number.
That dynamic could work in bitcoin’s favor over the long haul. But Timmer cautions that future halvings, which limit supply coming to market, might not affect bitcoin prices on par with previous halvings. The Fidelity expert noted that a base case for bitcoin gaining market value from gold implies the former would need to surge in jaw-dropping fashion over a short time frame. Using more sophisticated modeling, however, there’s a stronger case for bitcoin gaining ground on gold.
