Bitcoin has been repeatedly referred to as digital gold in recent years. Gold is considered one of the oldest and best-known stores of value in the world and was used as currency for centuries in the past in the form of coins. Bitcoin could now take over the function of gold in the future. How much would bitcoin be worth if it reached gold status?
In this article, we want to look at the future of bitcoin and show how valuable the cryptocurrency would be if it played an important role like gold in the future.
How much is bitcoin worth right now?
As of today, December 21, 2022, bitcoin is worth just over $16,800. Bitcoin’s value has fallen sharply over the past 12 months. At the turn of the year 2021/2022, the rate was still around $48,000. In November 2021, Bitcoin hit its all-time high of over $68,000.
Nevertheless, Bitcoin has grown tremendously in value in recent years. In 2013, Bitcoin was able to cross the $1,000 mark for the first time. In 2017, the price broke above $10,000 for the first time. In mid-2021, the price of Bitcoin broke above $50,000 for the first time. A move above $100,000 is very likely in the next bull market. In 2024 or 2025, this should most likely happen.
Why is bitcoin called digital gold?
Bitcoin has received the name digital gold in recent years. This is because the two assets have a lot in common in theory. Because gold is a precious metal that is characterized by its rarity. Due to its rarity and rarity, we consider gold precious. This is why gold has often been used as a means of payment throughout history.
Bitcoin is also characterized by its scarcity. Only 21 million bitcoins in total can be created on the bitcoin blockchain. The amount of bitcoin is therefore limited and the cryptocurrency is also scarce compared to the number of people on earth.
Bitcoin’s goal is to become the best gold in the digital age. Because it is not possible to increase the amount without the agreement of almost the entire decentralized network. This is what makes Bitcoin so interesting as digital gold and as a possible future global currency.
What is the price of Bitcoin if it catches up with gold?
More recently, the total market capitalization of gold was $11.826 billion. Especially in the last 3 years, this has further increased by around 30%. Bitcoin currently has a market capitalization of “only” US$324.303 billion.
If bitcoin were to reach the same market capitalization as gold in the future, then the value of a bitcoin would also have to rise massively. There are various calculations for this, but one cannot determine this value with certainty. It is assumed that one bitcoin should be worth around US$5 million in this case.
Why might bitcoin even overtake and replace gold?
In theory, Bitcoin’s promise of scarcity is far stronger than that of gold. Gold remains difficult to extract even with technological advances. The energy expenditure to extract gold from the earth remains high, which guarantees the value of gold. But it is possible that over the next few decades, technological advances will make it easier to find and mine gold. In theory, we could even mine gold in space.
With Bitcoin, scarcity cannot be overcome. This is guaranteed by the blockchain, which is protected by its decentralization. It is therefore extremely unlikely that the amount of bitcoins will be increased. The scarcity of Bitcoin is thus guaranteed even with technological advances.
Should you invest in Bitcoin now?
A Bitcoin price increase to US$5 million is of course not guaranteed. To do this, Bitcoin would have to be accepted as a means of payment worldwide. It could be years or decades before that happens.
Nevertheless, you can view Bitcoin as a long-term investment if you believe in its success.. In the current bear market, the price is relatively very low and the value of bitcoin may rise again in the coming months.
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