PANews reported on December 13 that 10x Research published an article on the X platform (The Optimal Allocation of Bitcoin in a Multi-Asset Portfolio). The article stated that contrary to popular belief, the price of Bitcoin is driven by demand, not changes in its (mining) supply. Each of Bitcoin's five bull markets has been driven by innovations in how investors access Bitcoin - from the creation of early spot exchanges to the use of tools such as futures, unsecured lending, spot Bitcoin ETFs, and now options on these ETFs. This development highlights the growing integration of Bitcoin with traditional financial markets, a trend accelerated by approvals from regulators such as the U.S. CFTC and SEC, which have legalized Bitcoin-related financial products over time.
Bitcoin has played a key role in consolidating its identity as 'digital gold' by prioritizing decentralization over increasing transaction throughput. This classification provides a framework for traditional financial investors to understand Bitcoin's role as digital gold in portfolio management, as a risk mitigation tool, or as an inflation hedge. It also offers insights into Bitcoin's potential valuation trajectory. The total value of gold above ground is approximately $18 trillion, of which $8 trillion is used for jewelry—an area that Bitcoin is unlikely to replace.
However, Bitcoin may occupy a portion of the $40 trillion in private investments (gold bars and coins), $3.1 trillion in central bank reserves, and $2.7 trillion in other uses such as industrial applications and financial institutions. This $100 trillion gold market segmentation is a potential target for Bitcoin. Considering Bitcoin's current market valuation of $2 trillion, this suggests that as it continues to position itself as digital gold, it has the potential for a 5-fold increase. There are significant differences in ownership between gold and Bitcoin. Approximately 1 billion people own gold jewelry, and another 150 million view it as an investment, either directly through gold bars and coins or indirectly through financial instruments like ETFs. There are significant differences in ownership between gold and Bitcoin. Approximately 1 billion people own gold jewelry, and another 150 million view it as an investment, either directly through gold bars and coins or indirectly through financial instruments like ETFs.
