Financial experts often compare Bitcoin to gold. Both assets are scarce, valuable, and preserve some of their value over time. VanEck’s Gabor Gurbacs, however, is confident Bitcoin can triple its market cap if it takes away part of the precious metal’s market share.
Gurbacs Is Bullish on Bitcoin
Over the past few years, numerous comparisons between Bitcoin and gold have been drawn. None of these comparisons really hold up over time. Both forms of value are very different at their core. Gold is a much better store of value than Bitcoin due to its lower volatility. However, that doesn’t make the world’s leading cryptocurrency completely useless to investors and speculators.
Vaneck’s Gabor Gurbacs is confident things will turn around for Bitcoin and that precious metal investors will start turning to the “digital gold” of cryptocurrency. With the current price increase in mind, the future suddenly looks very different. A long-term move from gold to Bitcoin can skew the numbers quite a bit. Bitcoin has always been a long-term investment first and foremost. Short-term fluctuations are ultimately irrelevant when looking at the bigger picture.
Given gold’s current market cap, the potential upside for Bitcoin is enormous. The $7 trillion gold market dwarfs Bitcoin’s market cap of $128 billion. It only takes a small percentile crossover from gold to cryptocurrency to make big things happen. A tripling of the Bitcoin market cap is not impossible, according to Gurbacs.
Tempering Short-Term Expectations
A brief positive spell of Bitcoin doesn’t usher in a full market recovery process. While the momentum remains positive, it can still turn around on a dime. This is a short-term snapshot of the Bitcoin market and not an actual representation of the overall sentiment. Volatility is the name of the game in the cryptocurrency world.
Gurbacs mentions how Bitcoin is used as digital gold. This is usually done to outlay systemic risk. It is an interesting option for smaller investors in this regard. Attracting the bigger crowd, however, is a different matter. Gurbacs confirms cryptocurrency needs to evolve as an industry. Compliance, regulation, and proper security measures will all play their role in this process.
Contrary to some claims, Bitcoin doesn’t have liquidity issues. Nor are the concerns over pricing benchmarks. It is a matter of time until Bitcoin is integrated into the financial ecosystem, according to Gurbacs. Such a development can quickly send Bitcoin’s value spiraling out of control. If and when that will happen is a different matter altogether.
Do you think Bitcoin will lure large investors away from gold? Let us know in the comments below.
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