Renowned Bitcoin analyst Willy Woo believes that Bitcoin’s market capitalization will surpass gold as excitement around spot Bitcoin Exchange Traded Funds (ETFs) subsides and capital inflows soar.
In a series of tweets on Tuesday, Woo outlined his projections, emphasizing the transformative impact of the newly introduced Bitcoin ETFs. Utilizing the so-called “back-of-the-envelope approach”, Woo estimated that asset managers, with a 2% allocation recommendation into Bitcoin, could bring about a staggering $2.56 trillion investment into the cryptocurrency. Based on market cap vs. money invested dynamics, Woo projected Bitcoin’s price to soar past $600,000 in the next bull market.
“The new Bitcoin ETFs bring price targets of $91k at the bear market bottom and $650k at the bull market top once ETF investors have fully deployed according to asset manager recommendations,” Woo stated, adding, “These are very conservative numbers. Bitcoin will beat gold cap when ETFs have completed their role.”
However, Woo underscored that these projections do not indicate the current cycle’s targets, cautioning that capital deployment takes time. Bitcoin’s market capitalization currently stands at $1.25 trillion, while gold’s market capitalization hovers around $16.12 trillion, illustrating the substantial ground Bitcoin would need to cover to achieve parity with the precious metal.
Notably, in a tweet last week, Woo highlighted Bitcoin’s decreasing annual supply growth rate, contrasting it with gold’s supply dynamics and the inflationary pressures traditional fiat currencies face.
“10 days to the halvening… Bitcoin’s annual supply growth drops from 1.7% to 0.85%. This beat’s gold’s number of 1.6% (gold supply doubles every 44yrs) USD is -1.7% right now in its fight against inflation. Normal range is 5-10%, when it reverts, BTC goes ballistic.” He had stated.
Woo’s sentiment resonates with analysts for Berlin-based crypto asset manager Deusche Digital Assets, who noted on Tuesday that Bitcoin’s Stock-to-Flow ratio is set to surpass gold after the upcoming halving event and has the potential to increase significantly in the years ahead.
This projection underscores Bitcoin’s potential as a hedge in macro portfolios, traditionally dominated by gold. They further noted that with geopolitical tensions escalating and inflation on the horizon, investors actively seek strategies to mitigate potential economic risks.
That said, the implications of Woo’s forecast extend beyond mere speculation, as it reignites the age-old debate between Bitcoin and gold. Despite Bitcoin’s market share still being far from gold’s, its maturation as a financial asset is poised to unlock unprecedented capital inflows, boosting its market cap significantly. Moreover, with Bitcoin’s supply growth rate set to decrease after the upcoming halving event, its appeal as a store of value is set to soar further.