Bitcoin To Overtake Gold? Is It Likely? What Does It mean?

This week some articles came out that Bitcoin is eating market share of gold and even could overtake it. The fact that this is even considered is already huge in my opinion, a few years ago this would be unimaginable. This proves that Bitcoin is heavily outperforming expectation and although most alt pumpers say that Bitcoin is broken, it is the only crypto that is a potential candidate for a challenge like this.

http://www.kitco.com/news/2018-04-23/Bitcoin-Beats-Gold-On-Every-Front-John-Pfeffer.html

https://www.cnbc.com/2018/04/21/bitcoin-nipping-at-gold-demand.html

http://bitcoinist.com/investors-choose-bitcoin-over-gold/

Can Bitcoin overtake gold?

Gold is the preferable store of value for ages and this will probably remain to be the case. However, since Bitcoin has better features and will be way more accessible especially for younger generations it could easily overtake gold measured in market capitalization.

Since use cases of Bitcoin are more diverse, it is easier to handle and more accessible there is a big chance that younger people will prefer Bitcoin and thus own more of it.

What does it mean when Bitcoin overtakes gold?

When Bitcoin overtakes gold in market cap it will be huge news, but actually it doesn't mean anything for the assets itself. People will always diversify and there will always be situations where the other asset is preferable.

Overtaking gold will not be more than a nice goal

For Bitcoin to overtake gold it needs to get to a market cap of about 8 trillion dollars. At the moment the cap of Bitcoin is around 160 billion, so the price will have to 50 fold to be as big as gold. This means a Bitcoin price of 467.500 dollar! It sounds like a lot, but I think this is very possible within a few years.

When Bitcoin grows to that size, it will already been viewed as a serious asset class by investors, so I don’t really expect an extra boost at that point because it gives legitimacy to Bitcoin. However, the fact that a huge milestone is reached will bring a lot of positive attention and this could further rocket the price.

Will Bitcoin eclipse gold?

I think gold will not suffer too much when it get’s overtaken by Bitcoin, because I expect store of value assets to gain popularity in the proces, so the overal market will probably grow. The rise of Bitcoin will teach the entire world population what money is (schools don’t teach this) and many will wake up to the fact that the current system is a huge scam.

Many of these people will invest in Bitcoin and gold as well, so both could benefit since the overall market grows. I can take myself as an example, I got interested in gold because I learned about money and the financial system through Bitcoin and saw the case for gold.

Is it better to invest in gold or Bitcoin?

I think gold and Bitcoin are perfect assets to combine in a anti inflation and crisis resistant portfolio. Gold can be seen as the stable asset while Bitcoin has a way bigger potential, but also more risk. Gold and Bitcoin are both looking extremely bullish at the moment. Gold is on the edge of breaking out through a 4 year holding resistance and Bitcoin is just turning bullish after a 70% crash while fundamentally everything is better than ever. Furthermore, both could benefit from upcoming global unrest and recession.

Looks bullish!

Since Bitcoin is heavily undervalued with a multiple of 0.94 I would allocate most in Bitcoin at the moment and increase gold holdings when Bitcoin becomes overvalued. To do this efficiently I created a PROTOCOL that allocates to be invested money to Bitcoin or gold depending on the Mayer Multiple.

Disclaimer
This is no financial advice, just my view on the market.

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