Bitcoin is in the process of replacing gold as a digital reserve asset, according to a report by Bloomberg Intelligence (BI), says Finextra.
Increasing demand and diminishing supply means that Bitcoin has the potential to hit the $100,000 price level this year as it builds towards becoming a global digital reserve asset.
„The value of Bitcoin has increased 10 times while under the microscope of US regulators and suggests the acceptance of digital currencies. Bitcoin saw its fourth straight daily gain yesterday, climbing briefly past the $55,000 mark late in the day,” explained BI.
“Funds are flowing to the benchmark crypto from gold, bonds and stocks as evidenced by Tesla, allocating some of its wealth towards Bitcoin,” says BI’s Commodity Strategist Mike McGlone.
“The process of Bitcoin replacing gold in portfolios is accelerating and we see risks tilted toward more of the same. (…) The fixed Bitcoin mining schedule sets it apart from most assets and markets with uncertain supply and demand meaning it can be adopted as a global store of value and in the process see its market capitalisation exceed that of Amazon,” added McGlone.
Bloomberg Intelligence says that the rising tide of Bitcoin adoption is simply prudent for the gold allocators, increasing the risk of the metal heading towards redundancy in a world that quickly becoming digitalized.