Realistic market cap for bitcoin

[brainactive]

Around 50% of the gold market cap is used for investment, the rest is held by central banks or used for jewelry and other industrial uses. Total market cap for gold is around $10 trillion.

1) Does that mean that even if bitcoin was to completely replace gold as a store of value, the realistic market cap would only be $5 trillion at the current time?
2) The above assumes that central banks would not hold any bitcoin. Is there any rationale for central banks holding bitcoin?

[1714500025]

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[1714500025]

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[CryptoCrookz]

1) Does that mean that even if bitcoin was to completely replace gold as a store of value, the realistic market cap would only be $5 trillion at the current time?

No, because transferring and holding bitcoin is easier than gold. There might be other store of value it disrupts.

2) The above assumes that central banks would not hold any bitcoin. Is there any rationale for central banks holding bitcoin?

Yes, central banks need reserves. If at some point they assume BTC is a good reserve, they will hold it. That would probably require reduced volatility, at least compared to real world products.

[brainactive]

Yes, central banks need reserves. If at some point they assume BTC is a good reserve, they will hold it. That would probably require reduced volatility, at least compared to real world products.

Why would they assume BTC is a good reserve? Wouldn't they want to keep their monopoly on gold rather than fomo into an asset that they are late for? 

[mk4]

1. A lot more. Simply because Bitcoin is far far more accessible worldwide compared to gold, and also taking into consideration that bitcoin is far more divisible than gold. Bitcoin is simply just far more superior to gold in everything besides the "you can't hold a bitcoin" thing.

2. If it proves to be a good inflation hedge; based on their standards.

Why would they assume BTC is a good reserve? Wouldn't they want to keep their monopoly on gold rather than fomo into an asset that they are late for?  

They'll hold something that doesn't consistently decrease in value annually; they don't hold assets necessarily to speculate. Doesn't matter if they're late/early; not to mention that not buying an asset just because you're "late" even if it's a good investment is a really really bad excuse in the world of investing.

[wayaneka]

Gold and Bitcoin have in common, they are a limited supply and as diversify risks if there any crisis and inflation in a country. However, most of the circulating supplies of Bitcoin are stored in personal wallets, which in many cases holders cannot send and sell them to exchanges because they forgot the private key. So for this reason, with lower number of circulating supplies, the Bitcoin marketcap is more likely to catch up with the gold marketcap. To reach $5 trillion of circulating marketcap, Bitcoin can be need times about 4 to 5 years more.

[OcTradism]

1) Does that mean that even if bitcoin was to completely replace gold as a store of value, the realistic market cap would only be $5 trillion at the current time?

Realistic marketcap is the weird definition I've ever heard of.

Bitcoin has a public ledger and public whitepaper. You can know what is circulating supply and total supply of Bitcoin. With temporary price of Bitcoin and circulating supply, you can get temp marketcap of Bitcoin.

If you don't want to calculate, check it on Coingecko. You don't know the lost bitcoin so can not get actual circulating supply. You can not get lost or actual marketcap, and you only have marketcap.

2) The above assumes that central banks would not hold any bitcoin. Is there any rationale for central banks holding bitcoin?

Bitcoin is for everyone on the planet. Banks can have Bitcoin, they have rights to buy and hodl Bitcoin. If they hodl Bitcoin, the game will have big participants and manipulations will be more serious.

Bitcoin is a speculative asset.

[Sithara007]

I have to disagree with some of the points made by the OP. He assumes that jewelry is not a form of investment. That is not right. Although it is not a very efficient form of investment, here in India a lot of people consider gold ornaments as a form of savings (have to add that a lot of people here don't trust the mainstream banks). It won't be that unusual to find families, where more than 50% of the portfolio is made up of gold ornaments. Investing in coins and bars is a relatively recent phenomenon in India. And despite the better efficiency, still a majority of the people prefer ornaments to coins.

What I wanted to say is that the current market cap of gold ($12 trillion) represents the fair value and not some inflated amount. 

[crwth]

Upon searching the total money in the world, it's estimated to be in $36.8 trillion. Of course, this is an estimate but we can never know the amount that there is because for sure there are some unaccounted for in this.

1) Does that mean that even if bitcoin was to completely replace gold as a store of value, the realistic market cap would only be $5 trillion at the current time?

So I'm not quite sure where you would get that $5 trillion market cap. If there are a lot of conversions of assets, it could change or not be limited to that.

2) The above assumes that central banks would not hold any bitcoin. Is there any rationale for central banks holding bitcoin?

If they want to be part of the growing change in finance, they should be part of that and it could be another value for them as well.

[NeuroticFish]

1) Does that mean that even if bitcoin was to completely replace gold as a store of value, the realistic market cap would only be $5 trillion at the current time?

Imho it's apples vs oranges. Bitcoin can be used as currency, investment and store of value and all this by the banks, institutions and also the average Joe. This means a much wider range of entities that are bale to easily own some bitcoin. Also I don't expect banks to completely replace gold unless some more huge sources for cheap gold are found, making it useless as store of value.
All in all, it's impossible to find out a "realistic" market cap for Bitcoin. Imho sky is the limit.

2) The above assumes that central banks would not hold any bitcoin. Is there any rationale for central banks holding bitcoin?

Central banks don't own only gold. Many countries' central banks also own foreign currencies like Euro or US Dollar. I expect that they'll also diversify into Bitcoin. Companies have already seen its potential. Do you really think that the banks won't see it?