Investing.com – Bitcoin‘s unprecedented rally above $55,000 Friday, took its market cap well beyond $1 trillion, placing in on track to become more valuable than gold in market cap within this decade as its reputation as a store of value gathers pace, experts say.
BTC/USD rose 6.15% to $54,954, and notched a high of $55,680 earlier in the day. The rally took its market cap to $1.03 trillion, still some way off gold’s estimated market cap of about $10 trillion.
In recent years, Bitcoin’s has had a tough time winning over Wall Street, widely touted as the final piece of the credibility jigsaw needed for crypto to hit the big time. But now with its reputation as a store of value firmly entrenched, it can fulfil its promise as “digital gold.”
“There were a lot of ‘Bitcoin killers’, although none have succeeded. Bitcoin has reached its exit velocity, so now, I have a 95% conviction that it will surpass gold in market cap within this decade,” said Luis Cuende, Co-Founder of Aragon, a platform for building & running decentralized autonomous organizations. “
Winning over institutions was far from a smooth journey.
JPMorgan (NYSE:JPM) CEO Jamie Dimon once dismissed bitcoin as a “fraud” – but later apologized– while Berkshire Hathaway B (NYSE:BRKb)’s Warren Buffett, the oracle of Omaha, famously proclaimed bitcoin to be “rat poison squared.”
The wave of institutional demand suggests the tide is turning. Asset managers like Blackrock (NYSE:BLK) seeking to diversify their portfolios or institutions like Tesla (NASDAQ:TSLA) growing wary of depreciating bonds and cash on their balance sheet are turning to bitcoin.
In the era of central bank easing, having an “algorithmic supply really matters,” Cuende added. ” “Distinct from the 2017 bull run, this time it’s institutions who have woken up to the fact that there is one global, decentralized store of value that cannot be controlled by a committee composed of a select few.”
Still, history suggests that after every bull run in crypto, a correction follows. Bitcoin’s could be unrelenting, even drastic, but will likely be met with a wave of demand.
“I’m unable to foresee how much of a pullback there will be, or when it will occur, but usually crypto assets tend to overcorrect after a bull run, falling up to -80% from their all-time high. If something as drastic as that happens, a pull back below $30k is likely, but I expect that a lot of buy demand would chime in and restore bitcoin to its $50k levels,” Cuende said.
Source: Cryptocurrency - investing.com
