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Bitcoin market capitalization of $1 trillion: BTC and the 10% bet on gold

Bitcoin investor Lyn Alden said that Bitcoin market capitalization could reach 10% of that of gold in the future. This means that BTC would be at a price of around $50,000 per Bitcoin Since she does not expect fundamental changes in monetary policy, she thinks that Bitcoin’s market capitalization will increase to $1 trillion in the next few years.

Sharon Harris

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Since the beginning of the year, Bitcoin’s exchange rate has risen from $7,200 to over $16,000. Thus, BTC has not only been able to demonstrate growth of over 100% but has also significantly increased its market capitalization. This currently amounts to around $300 billion. From this point of view, a market capitalization of the digital currency of $1 trillion does not seem so unrealistic.

What about the BTC bet that Bitcoin will soon have 10% of gold’s total market capitalization? If you want to find what investor Lyn Alden thinks about the possibility and to read more details about the current Bitcoin exchange rate, download for free our companion app. The Born2Invest mobile app brings you the latest finance news so you can stay on top of the market.

Bitcoin market capitalization at $1 trillion?

The basis of this article is an interview between the investor Lyn Alden and Cointelegraph.

Alden, who in 2017 was still a major critic of Bitcoin, spoke in the interview about her current perspective on the digital asset. Alden said that 2020 and the macroeconomic factors have, in her opinion, greatly contributed to the strengthening of the narrative around BTC.

As a result, Alden also talks about the network effect of Bitcoin. Since she does not expect fundamental changes in monetary policy, she thinks that Bitcoin’s market capitalization will increase to $1 trillion in the next few years.

Her opinion and fear at that time of a so-called dilution of the network effect, Alden rejected meanwhile. At that time, the investor saw the danger of capital being withdrawn from Bitcoin and spilling over to other protocols.

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“I feared dilution. If there is not one network that reaches critical size, the market capitalization and thus the capital behind it could spread across many networks and protocols.”

Bitcoin network in 2020 is much more mature

In the meantime, however, the Bitcoin network is so strong that it has long since reached critical size. Also, further factors like the topic approximately around PayPal can contribute to the fact that the network size of Bitcoin will rise in the next few years by three-digit percentages.

In the connection, Alden speaks evenly over macroeconomics and the effects of monetary and financial policy. In her opinion, the combination of increased supply of fiat money and historically low interest rates is helping to ensure that hard assets such as gold and Bitcoin benefit.

For this reason, the investor also draws on the Bitcoin-Gold comparison

“When Bitcoin’s market capitalization reaches $1 trillion, it is only 10% the size of gold. So could Bitcoin reach 10% of the size of gold? – Yes, I think so.”

With this quite realistic scenario, the market capitalization of Bitcoin would be about 3.3 times as high as today. As a result, the BTC price would also have to increase by a factor of 3.3 from today’s perspective. This means that we would be at a price of around $50,000 per Bitcoin.

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(Featured image by christopher_muschitz via Pixabay)

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First published in CRYPTO MONDAY, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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Sharon Harris is a feminist and a part-time nomad. She reports about businesses primarily involved in tech, CBD, and crypto. She started her career as a product manager at a Silicon Valley startup but now enjoys a new life as a personal finance geek and writer. Her primary aim is to provide readers with a new perspective on the overlapping world of finance and technology.