The recent fluctuations in Bitcoin (BTC) and gold prices have reignited discussions about the market value competition between these two assets.
Bitcoin's Target Price to Surpass Gold's Market Capitalization
Current data provides a clear indication of the price level Bitcoin needs to achieve to surpass gold's total market capitalization. For BTC to overtake gold, its price would need to reach $1,425,216.
Presently, Bitcoin's market capitalization stands at $2.06 trillion, whereas gold's is valued at $28.43 trillion. This means that Bitcoin currently represents approximately 7.26% of gold's total market capitalization.
Challenges in Valuing Gold's Market Capitalization
While Bitcoin's market value is verifiable through transparent on-chain data, estimating gold's total supply can present challenges. Reports from the World Gold Council and other sources have updated gold supply figures over time. However, the true market value of gold can vary significantly due to the difficulty in accurately calculating its physical inventory. Despite these complexities, current data indicates that Bitcoin's price would need to exceed $1.4 million to surpass gold's market cap.
Historical Price Performance: Bitcoin's Dominance
Examining price performance over the past five years reveals Bitcoin as the clear leader. During this period, Bitcoin has seen a substantial gain of 577%, while gold has increased by 118%. The three-year performance also favors BTC, with Bitcoin gaining 488% compared to gold's 138%. Over the two-year period, BTC's return is 177%, contrasted with gold's 110%.
Recent Performance Trends: Gold's Short-Term Advantage
The market picture has become more balanced over the past year, with gold showing stronger performance, achieving a 52% gain, while Bitcoin has experienced a weaker period with a 28% gain. In the short term, gold has emerged as the frontrunner. Since the beginning of the year, gold has gained 55.95%, significantly outperforming Bitcoin's gain of 10.65%. Over the last three months, one month, and one week, Bitcoin has trended downwards, while gold has registered positive returns.
Supply Dynamics: Bitcoin's Increasing Scarcity
On the supply side, the roles are distinctly reversed. Bitcoin's annual supply growth rate is 0.83%, whereas gold's annual supply growth is 1.72%. This difference suggests that Bitcoin is becoming scarcer over time, which can strengthen its position as a long-term store of value.