In the past few days, gold has gone up four percent. Although it may not sound like much for cryptocurrency traders, the precious metal rose in value by almost twice the amount of Bitcoin’s total market capitalization during that span.
Gold’s overall market capitalization is around $8T. Recently spiking four percent in the past few days, gold added around $320B in this time. To put things in comparison, Bitcoin has a market capitalization of $174B. In other words, gold rising four percent is comparable to almost double that of Bitcoin’s market capitalization.
The comparison points to how undervalued Bitcoin still is compared to gold. Bitcoin’s market capitalization is measly compared to the $8T in global gold reserves. Bitcoin may aspire to someday be a “store of value,” but it has yet to become a significant fraction of gold’s total market capitalization. That may be taken as a bullish sign for many Bitcoin investors.
In the past few days, the market cap of Gold went up 4%. The value of all gold is almost $8 trillion.
— The Moon (@themooncarl) June 21, 2019
Bitcoin is often compared to gold due to its similar function. Both are seeking to be a sort of rare ‘reserve currency’ of the world. Gold, however, is difficult to transport and somewhat archaic. Still, if Bitcoin truly is to replace gold, then it has a long way to grow.
In the early 2000s, the first ETF for gold was approved — which sent the price to all-time highs. Now, investors could park their funds in gold ETFs that were previously unavailable. As a result, liquidity increased alongside an overall interest in investing. Bitcoin enthusiasts are looking to replicate this same model, and gold is certainly an inspiration.
It is possible that, someday, we could see Bitcoin replace gold. However, for now, Bitcoin is merely a tiny blip compared to the precious metal — but, perhaps, not for long.
Do you believe Bitcoin could ever eclipse gold in market capitalization? Let us know your thoughts below.
Images courtesy of TradingView, Twitter.