Will BTC turn its market value into physical gold?
Bitcoin is often addressed as digital gold. Will the largest cryptocurrency reverse the market value 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 would need to grow over 30 times to overturn gold’s market cap.
Bitcoin has just advanced 3.32% on its journey to turn the shiny metal, according to one Twitter bot which compares the exchange rate and market value of Bitcoin and gold.
The digital gold?
Both Bitcoin and gold are used as a store of value and medium of exchange.
The precious metal has an additional use in the form of jewellery. But the precise 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 whether a gold bar is authentic, while verification of Bitcoin is just a few clicks on the internet. Because of these factors, society believes that the flip is unavoidable.
Bitcoin vs Gold: Is there no intrinsic value backing BTC?
Economist Peter Schiff believes that Bitcoin is not backed by anything that has intrinsic value. He said in a podcast:
“The truth is that the real success of Bitcoin rests on more people buying it. If you own it, you have to get a lot of your friends or colleagues to buy it because that’s the only way its prices will go up. Bitcoin is not an asset like real estate where you can collect rent, stocks where you can collect dividends or bonds where you get paid interest. … It’s not like a commodity where you can actually use it for something, like oil to generate power. … It’s not like gold, where you can make jewelry out of it or conduct electricity with it or use it in all kinds of industrial applications like other metals.”
There are various counterpoints to Peter Schiff’s anti-Bitcoin stance, notably by Michael Saylor, who believes that Bitcoin is a merchandise which provide utilitarian benefits. The co-founder of MicroStrategy has made a bold statement that Bitcoin will cross over $100 trillion in market capitalization, surpassing the market capitalization of gold by a significant margin.
There are different perspectives offered by the Bitcoin community and the community with an anti-Bitcoin stance. Only time will tell which side wins the prediction game.
For BeInCrypto’s latest Bitcoin (BTC) analysis, click here
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