Galaxy Digital CEO Mike Novogratz is confident that in the coming years Bitcoin may well reach the level of gold capitalization and even surpass the precious metal in popularity.
During the broadcast of Squawk Box on CNBC, the billionaire announced «the growing adoption of digital assets» , which is happening at a faster pace than experts previously predicted.
Comparisons between gold and Bitcoin have happened quite often lately, and usually it ends in favor of the latter. The fact is that precious metal loses to cryptocurrency in many ways. In particular, its production is centralized, and it will not work to move ingots to another country without a lot of questions from the border guards. In addition, the gold cannot be divided without the participation of a professional. What is especially important, its maximum amount is unlimited and unknown, and this, in theory, jeopardizes the asset price. Indeed, if a large deposit is found, the value of the metal in stock will be lower.
Also, one cannot but recall the return on assets. If you invested $ 1 in Bitcoin at the end of 2009, today it would turn into $ 77.29 million. At the same time, a similar investment in gold would turn out to be only $ 1.63. And this is in 11.5 years.
Comparison of the profitability of Bitcoin and gold over 11 years
Mike Novogratz assumes that the achievements of cryptocurrency will not end there. He predicts that BTC will outstrip the corresponding indicator of gold.
Bitcoin vs Gold: Which to Choose?
Chapter Galaxy Digital explained that his previous goal of Bitcoin at 60 thousand dollars was too conservative. It was based on Bitcoin reaching about 10 percent of the market capitalization of gold. Accordingly, now the bar for BTC prospects has been raised.
Here is a line from Mike, in which he shares his attitude to what is happening. The replica is provided by Cointelegraph.
At the beginning of the year, I thought my goal was the $ 60K level, because that would be 10 percent of the gold capitalization. But I told myself and our investors that once Bitcoin hits that mark, we assume that it will rise to 20, 50 and then 100 percent of the precious metal’s market capitalization.
Since the cryptocurrency has already reached this mark, analysts have edited their vision of the prospects for Bitcoin. Recall that the maximum of its rate was fixed at $ 61,711, which BTC cost on March 13, 2021.
Mike Novogratz
Now the billionaire is confident that the cryptocurrency can reach new all-time highs, even in this bullish cycle. The expert continues.
I really think Bitcoin is on an inevitable path towards the same and higher market cap as gold.
We have updated the latest data: now the market capitalization of the precious metal reaches 10.7 trillion dollars . A similar figure for Bitcoin so far hovers around $ 1.1 trillion . That is, according to Novogratz’s forecast, the price of BTC may grow at least 10 times more, or approximately to the level of 600 thousand dollars.
Naturally, you should not take this bar as a mandatory threshold that Bitcoin «must» reach. However, thanks to him, it becomes clear that the potential of the cryptocurrency is much wider than one might think. At least billionaires are sure of this.
The CEO of MicroStrategy, which acquired 91,326 bitcoins, supports this view. As Michael Sailor said on his Twitter account the day before, “gold doesn’t work anymore,” and it was Bitcoin that broke the precious metal. In addition, he gave a comparative table of the profitability of investing $ 1 in BTC and gold for different time periods. As you can see, in five years, this amount with the help of Bitcoin would turn into $ 139.
Gold and Bitcoin profitability
We believe that Novogratz’s comments really reflect what is happening in the niche. Although Michael’s company is a major Bitcoin investor, the entrepreneur himself sees great potential in BTC. Cryptocurrencies now provide opportunities that are not available for classic assets such as stocks or precious metals. Against the backdrop of blockchain coins, they really seem outdated.
