Bitcoin's Role as Digital Gold and Its Growth Potential

According to BlockBeats, on December 13, 10xResearch shared insights on social media regarding Bitcoin's strategic focus on decentralization over increasing transaction throughput. This decision has been pivotal in establishing Bitcoin's identity as 'digital gold.' This classification provides traditional financial investors with a framework to understand Bitcoin's role in portfolio management as a digital gold, risk mitigation tool, or inflation hedge. It also offers insights into Bitcoin's potential valuation trajectory. The total above-ground gold stock is approximately $18 trillion, with $8 trillion attributed to jewelry, a sector Bitcoin is unlikely to replace. However, Bitcoin can target $4 trillion in private investments (bullion and coins), $3.1 trillion in central bank reserves, and $2.7 trillion in other uses, such as industrial applications and financial institution holdings. This $10 trillion segment of the gold market represents Bitcoin's potential target. With Bitcoin's current market valuation at $2 trillion, it suggests a potential for fivefold growth as it continues to position itself as digital gold. There are significant differences in the ownership of gold and Bitcoin. Approximately 1 billion people own gold as jewelry, with an additional 150 million holding it as an investment, either directly through bullion and coins or indirectly through financial instruments like ETFs. In contrast, Bitcoin ownership is estimated to be higher, with up to 600 million individuals holding it as an investment. This gap is expected to widen, as research and surveys indicate that 25% of millennials are cryptocurrency holders, including Bitcoin, compared to only 4% of baby boomers.