Crypto bulls have long believed that Bitcoin will replace gold as a safe-haven asset. The overall capitalization of the cryptocurrency market has come close to surpassing the precious metal. So can Bitcoin surpass gold?

 

 

Can Bitcoin surpass gold?

A new report from global brokerage and research firm Bernstein suggests that the industry’s overall market cap has recently exceeded $2 trillion, sitting on an almost equal footing with gold, a key component of most diversified investment portfolios held by private investors.

Bernstein used the following statements in a note he distributed to his customers on Tuesday:

Investors need to find streams of returns that can hedge the risk of impairment and diversify stock risk at higher inflation levels.”

The note also states that cryptocurrencies “may have the potential to perform this function.”

Corporate interest on the rise

Cryptos continue to grow in popularity and gain mainstream attention as interest in BTC and other alternatives turns into more demand from big institutions and big businesses like Square and Tesla.

Coming back to gold, Bernstein pointed out in his research that based on his calculations, the market cap of gold (current price $1,864/ounce) is close to $8 trillion, or 4x the crypto universe.

Bernstein’s Harshita Rawat believes that although the gold standard has been recognized around the world as a reliable form of money for thousands of years, given some regulatory and environmental questions, Bitcoin could replace the precious metal.

Instant transactions and high liquidation effect

“Bitcoin can be more easily used as a store of value anywhere in the world (especially in countries with unstable fiat currencies) and is very liquid,” Rawat said, highlighting the cryptocurrency’s 24/7 network and nearly instantaneous transactions.

“The effects as a store of value are significant, especially in certain countries/regimes.”

Rawat also said that BTC and cryptocurrencies more generally have reached the “overflow point” in terms of “corporate/retail adoption, dollar investments, talent working in the industry and liquidity.”

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