Can Bitcoin rival gold and become worth $900,000?

Bitcoin is seen by many as digital gold. Even the chairman of the US central bank recently made this comparison.

If Bitcoin manages to deliver on that promise and rival gold, it would currently fetch a price of $900,000. But how realistic is that?

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Bitcoin to $900,000?

Matching gold sounds very nice, but it is not that simple. You can compare Bitcoin to gold because of its scarcity, but a large part of the value of the precious metal is also in jewelry. And of course you cannot hang Bitcoin around your neck.

The chart below shows how Bitcoin is developing compared to gold.

And it’s true that all the gold ever found is worth $18 trillion, but a large part of that is in jewelry. According to the data below from Porkopolis, this amounts to more than 8 trillion dollars in gold, which is used in jewelry.

What is interesting is that Bitcoin is currently almost worth more than all the gold in the vaults of central banks. That is estimated at more than $3 trillion, and Bitcoin’s market cap has now exceeded $2 trillion.

If we continue at this rate, it won’t be long before Bitcoin is worth more than all the gold in the vaults of central banks. And that in itself is worth celebrating.

We’re closer than you think

What exactly does this say about Bitcoin? Well, first of all, we are a lot closer than we think. Because it is of course very special that after almost 16 years Bitcoin comes close to all the gold that central banks keep.

For the rest, we still have to be patient.

But it also shows that gold parity, being on par with gold, is not so black and white. Because gold in jewelry is not necessarily held as an investment.

You could also say that only the gold owned by central banks, and the gold incorporated into coins and bars, exists for investment purposes.

If you look at it this way, it would be just over $10 trillion in gold held as a store of value. And Bitcoin may come closer to that a little faster, but that also results in a slightly lower price at that much-discussed parity.

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