Bitcoin (CRYPTO: BTC) proves that nothing is protected from disruption. Technology has created a completely new store of value that went from being worthless to a $2.3 trillion market cap in nearly 17 years. Investors who have weathered the ups and downs have been rewarded.
Even after such a monumental rise in the past, with Bitcoin rising 967% in the last five years (as of Sept. 17), there could still be huge upside as we look ahead. But can the world’s top cryptocurrency deliver a 10x return?
There is no straightforward way to conduct a proper valuation exercise for Bitcoin, as it isn’t like a regular company. But that doesn’t mean investors can’t look for comparisons to guide them.
Bitcoin is often viewed side-by-side with gold, which has been the leading store of value for thousands of years. The value of all the gold on Earth is estimated to be $24.8 trillion. Should Bitcoin get on par with the precious metal, it implies a roughly 10x return.
Astute investors will be asking why Bitcoin deserves to be valued at the same level as gold. Gold might have the longer history, but the top digital asset is superior in other areas. Bitcoin is easily portable across far distances. It can be used in transactions, and it’s easily divisible. Perhaps most importantly, it’s scarcer, with a hard supply cap of 21 million.
It wouldn’t be surprising to see Bitcoin increase 10-fold in price in the next decade, especially as the world becomes more digital.
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