Research firm Bernstein believes that Bitcoin could eventually replace gold.
"We expect Bitcoin to replace gold as the premier 'store of value' asset of the new era over the next decade and become a permanent component of institutional multi-asset allocations and a standard for corporate treasury management," the firm's analyst Gautam Chhugani wrote in a report Thursday.
In fact, Federal Reserve Chairman Powell also compared Bitcoin with gold on Wednesday local time. He claimed that Bitcoin is not a competitor to the US dollar, but a competitor to gold.
Before Bernstein made the above comments, Bitcoin reached $100,000 for the first time in history, further expanding its massive gains for 2024. Year-to-date, the world’s largest digital currency has risen by 141%, largely benefiting from investor bets that the incoming Trump administration will be more favorable to the cryptocurrency industry since the U.S. elections on November 5.
Chhugani is not the only analyst who believes that Bitcoin can play a larger role in the economy.
Gil Luria, head of technology research at D.A. Davidson, wrote that he believes "the primary current application of Bitcoin is as a store of value — an appreciating, low-correlation asset that can replace gold as a tool for hedging against declining economic stability."
Although the correlation between Bitcoin prices and inflation is currently low, and the correlation with other risk assets is high (which is different from gold, which is seen as a safe-haven asset and inflation hedge), Luria believes that Bitcoin is "primarily driven by adoption rates," which he sees as having a "looser correlation" with market drivers. The analyst cites factors such as employment, regulation, tax policy, and globalization.
However, Luria added that it is certain that there is still a long way to go before Bitcoin is widely accepted as a medium of exchange and a unit of account.
In any case, there have been increasing bullish comments after Bitcoin broke the significant psychological threshold of $100,000.
Bernstein expects Bitcoin to reach $200,000 by the end of 2025. Standard Chartered also believes that the price of this cryptocurrency could double by the end of next year. Analyst Geoff Kendrick stated in a report on Thursday that its target price for Bitcoin in 2025, set around $200,000, is "achievable."
Kendrick wrote: "If Bitcoin is adopted more quickly by U.S. pension funds, global sovereign wealth funds (SWF), or potential U.S. strategic reserve funds, we will become more bullish. By 2025, we expect institutional fund flows to remain at or above 2024 levels. MicroStrategy is advancing its $42 billion three-year plan, so its purchase volume in 2025 should reach or exceed 2024 levels."
Kendrick noted that as early as April 2023, Standard Chartered predicted that Bitcoin would rise to $100,000 by the end of 2024, when the cryptocurrency was trading around $27,000.
Article reposted from: Jinshi Data
