Bitcoin is often addressed as digital Gold. Will the largest cryptocurrency flip the market cap of physical gold?
The current market cap of Bitcoin is over $366 Billion, while the market cap of gold is estimated to be over $11 Trillion. Bitcoin’s market cap will have to grow over 30 times to flip the gold market cap.
Bitcoin has just progressed by 3.32% on its journey to flip the shiny metal, according to a Twitter bot that compares the exchange rate and market cap of Bitcoin and gold.
The digital gold?
Both Bitcoin and gold are used as a store of value and a medium of exchange.
The precious metal has an additional use case in the form of jewelry. But the exact physical nature of gold makes it challenging to store and transfer. Bitcoin can be transferred faster because it has no physical limitations. Bitcoin also eliminates the need to involve a third party for transactions.
Furthermore, only experts can verify if a bar of gold is authentic, whereas verifying Bitcoin is just a few clicks on the internet. Due to these factors, the community believes that the flip is inevitable.
Bitcoin vs Gold: Is there no intrinsic value backing BTC?
Economist Peter Schiff believes that Bitcoin is not backed by anything that holds intrinsic value. He stated in a podcast:
“The truth is the real success of Bitcoin rests on more people buying it. If you own it, you need to get many of your friends or colleagues to buy it because that’s the only way its prices go up. Bitcoin is not an asset like real estate where you can collect rent, stocks where you could collect a dividend or bonds where you get paid interest. … It’s not like a commodity where you actually can use it for something, like oil to generate power. … It’s not like gold, where you could make jewelry out of it or conduct electricity with it or use it in all sorts of industrial applications like other metals.”
There are various counters to Peter Schiff’s anti-Bitcoin stance, most notably by Michael Saylor, who believes that Bitcoin is a commodity that provides utilitarian benefits. The co-founder of MicroStrategy has made a bold statement that Bitcoin will cross over $100 trillion in market cap, surpassing the market cap of gold by a significant margin.
There are various perspectives offered by the Bitcoin community and the community with an anti-Bitcoin stance. Only time will tell which side wins the prediction game.