Seriously. How much market cap can Bitcoin absorb from other assets?

[Poker Player]

After the latest crazy prediction about Bitcoin price, I seriously wonder how much market cap Bitcoin can absorb.

I think the vast majority of us on this forum would agree that Bitcoin is better than gold as a store of value and that it would make sense to absorb its market cap. If we have Bitcoin with a market cap of about $1T and gold with a market cap of about $11T, we see it quite likely that Bitcoin in the not too distant future will have a $10T market cap and gold $2T. This would leave us with a price of $0.5M per Bitcoin.

However, there are several authors who say that it will absorb even more market cap, from the Bond market, from the Stock market, even from the Real Estate market.

If it were to absorb much of that market cap it could reach $100T, leaving an approximate value of $5M per bitcoin.

But do you really think it can absorb so much market cap from other assets?

Total global wealth is around USD 420 trillion

Do you really believe that a quarter of all the wealth created in the world is going to be absorbed by Bitcoin? If we were talking about absorbing a total of $40T, then I would probably see it as much more realistic, and taking a long time to get there, but I don't know if people who are into Bitcoin end up having some sort of clinical bias.

Note: I am taking inflation into account here. If I talk about $5M it is with current prices, or the figure that will result in the future from multiplying that figure by inflation.

[hatshepsut93]

I think the vast majority of us on this forum would agree that Bitcoin is better than gold as a store of value and that it would make sense to absorb its market cap. If we have Bitcoin with a market cap of about $1T and gold with a market cap of about $11T, we see it quite likely that Bitcoin in the not too distant future will have a $10T market cap and gold $2T. This would leave us with a price of $0.5M per Bitcoin.

If the price of Bitcoin was decided on this forum, it would already be many millions. But it doesn't matter what people think here in grand scheme of things, you can forget about seeing Bitcoin flip gold until most of global investors view Bitcoin as better than gold. And currently this sentiment is very low, and rightfully so, gold has been the store of value for thousands of years, and Bitcoin has still to prove itself to many people.

[Upgrade00]

Bitcoin is still about 12 years old, which is relatively small compared to many other financial assets. We can speculate all we want on the future price of Bitcoin, how much market cap it can absorb, or how it would become the one world currency, but that doesn't really matter.

For me, all that matters at this point in the growth of the network, is the next full node that goes live, or the next holder to trust verify the network, or the next merchant to accept bitcoin, or the next country to legalize it, or the next BIP which is implemented.

Bitcoin is a lot more than the dollar equivalent.

[Charles-Tim]

But do you really think it can absorb so much market cap from other assets?

I do not think so. If bitcoin will absorb gold marketcap significantly, it would have been obvious, also other assets. But what I noticed is that Bitcoin has been an alternative and has gained many people's attention that can result to more bitcoin demand, bitcoin has now been an asset alternative to others assets like gold. The extent to which people should buy gold and other assets may reduce as these are used to buy Bitcoin or other cryto assets. But with the devaluation of USD, there is nothing impossible because fiat devaluation will help in bitcoin's price valuation, and we do not know how to economy will be in the next 10 or more years.

[mk4]

Bitcoin's potential marketcap ceiling is definitely high as hell, that's for sure. But a better question is, how likely are we to reach those high $10T+ or $100T+ numbers? I definitely think it wouldn't happen anytime soon, simply because it's unlikely for the genX-ers and the Boomers to be convinced of buying purely digital assets, whereas the concept of digital assets is far easily grasp-able by millenialls and genZ-ers. I'd say probably when the boomers and genX-ers retire and die off(morbid, I know).

[pooya87]

Why do you think bitcoin is "absorbing" market cap from other assets?!!!
For example I myself never had any assets the first time I bought bitcoin and if I hadn't done that the money would have stayed in my bank account doing nothing. There are a lot of people who are cutting certain bad-expenses (eg. quit smoking) and putting that money into bitcoin because it is BITCOIN otherwise that money would have never made its way to any "asset".

Additionally the places in the world where they treat bitcoin as a currency is increasing, specially among under-developed countries. As bitcoin adoption grows in these places and consequently the price rises they aren't absorbing the market cap from anywhere else.

Do you really believe that a quarter of all the wealth created in the world is going to be absorbed by Bitcoin?

That's the thing, you are thinking of bitcoin as an asset while it is actually a currency.
If there is indeed "around USD 420 trillion" in circulation then a unique global currency that works 24/7 so much faster and safer than all the 420 trillion combined should have a much higher value than the 420 trillion instead of only having 1/4 of it.

[stompix]

I think the vast majority of us on this forum would agree that Bitcoin is better than gold as a store of value and that it would make sense to absorb its market cap. If we have Bitcoin with a market cap of about $1T and gold with a market cap of about $11T, we see it quite likely that Bitcoin in the not too distant future will have a $10T market cap and gold $2T.

And why do you think the so-called gold market cap will crash 5 times?

First thing is that half of that so-called market cap is not in gold that stays in some vault in a bank and is in jewelry, are we going to seriously see a drop in demand for jewelry just because bitcoin is a better store of value? The cheapest engagement ring still is above 2 grams, multiply that by the population of the earth and you end up at least 3 times the gold reserves of the united states, even if we assume half of the world population is way too poor to afford one there are plenty who would compensate for an entire region of the city.

But leaving that aside, in order for gold to lose 5 times that value it would need people to massively sell it and this is just like bitcoin, if you have people who believe in the value of something it doesn't make sense for them to sell so cheaply and 5 times below the price they've bought in. And now the most important part, how are you going to convince ordinary people who don't care that much about technology that something they know has value, something they knew for a long time and something it's advertised all over the world as being of value that is less valuable than a bunch of numbers in an app? Not to mention that you can't have bitcoin plated rims, no matter how much you try.

Total global wealth is around USD 420 trillion  (https://www.credit-suisse.com/about-us-news/en/articles/media-releases/global-wealth-report-2021-202106.html)
Do you really believe that a quarter of all the wealth created in the world is going to be absorbed by Bitcoin?

Hihi, imagine this
People dump 50% of the shares in companies, land, houses, everything that makes wealth, and buy bitcoin with that money. What is the result? You will have half of the value in wealth and twice the value in currency. Guess where that leads to! Not a pretty place!

[davis196]

How do you imagine Bitcoin "absorbing" other assets?
The vast majority of the people suddenly deciding to sell stocks,bonds,gold,real estate and buy Bitcoins?
And then what?HODL those Bitcoins waiting for another ATH?This means that Bitcoin will confirm it's role of being "digital gold" rather than becoming a truly functional currency.Is that what we want?
The banks,hedge funds and the major corporations will begin with the FUD,the same moment they realize that the people are selling stocks/bonds and buying BTC.There will be a reaction from the fiat monetary system fro sure and that reaction will be major FUD,combined with lobbying to the governments to regulate the crypto world even more.

[mk4]

And then what?HODL those Bitcoins waiting for another ATH?This means that Bitcoin will confirm it's role of being "digital gold" rather than becoming a truly functional currency.Is that what we want?

The people who want to hold bitcoin will simply hold, while those who want to spend it will continue to spend. Or, maybe both. Is that too complicated? The point of bitcoin is freedom to do whatever you want to do with your money.

The banks,hedge funds and the major corporations will begin with the FUD,the same moment they realize that the people are selling stocks/bonds and buying BTC.

They have been doing this for years already LOL.

[wxa7115]

After the latest crazy prediction about Bitcoin price, I seriously wonder how much market cap Bitcoin can absorb.

I think the vast majority of us on this forum would agree that Bitcoin is better than gold as a store of value and that it would make sense to absorb its market cap. If we have Bitcoin with a market cap of about $1T and gold with a market cap of about $11T, we see it quite likely that Bitcoin in the not too distant future will have a $10T market cap and gold $2T. This would leave us with a price of $0.5M per Bitcoin.

However, there are several authors who say that it will absorb even more market cap, from the Bond market, from the Stock market, even from the Real Estate market.

If it were to absorb much of that market cap it could reach $100T, leaving an approximate value of $5M per bitcoin.

But do you really think it can absorb so much market cap from other assets?

Total global wealth is around USD 420 trillion

Do you really believe that a quarter of all the wealth created in the world is going to be absorbed by Bitcoin? If we were talking about absorbing a total of $40T, then I would probably see it as much more realistic, and taking a long time to get there, but I don't know if people who are into Bitcoin end up having some sort of clinical bias.

Note: I am taking inflation into account here. If I talk about $5M it is with current prices, or the figure that will result in the future from multiplying that figure by inflation.

That is an interesting question and unfortunately there is not a direct answer, everything is going to depend on the circumstances that surround bitcoin, I think is pretty much a given that bitcoin is going to absorb a significant market share of gold because the main selling point of gold has been that it is a store of value, but bitcoin is able to perform that function in a more efficient way and as such is completely natural that the better asset absorbs the market share of the lesser asset.

However when we are talking about bigger numbers then without a doubt we're going to need a huge financial crisis, and by huge I mean one that is systemic and that puts all the economies of the world at risk, at that point the sky is the limit for bitcoin as there is nothing more valuable in a systemic crisis like that than a store of value.

[el kaka22]

What you are forgetting while calculating is the fact that the global wealth is growing every year, just recently USA government gave 3.2 trillion dollars pump into the stock market, so each year there will be more and more growth and that means eventually one day we are going to stop talking in trillions and start talking in quadrillions and at that moment bitcoin being super high is not a shock.

I am not saying that it will be hundreds of millions of dollars, but a million dollars in bitcoin looks like it's given, it is obvious, there is no way it will not happen, it WILL happen but we just don't know when. And after that it is just time that we need for it to reach 10 million and then 20 million then even more. These are not things that are "unknown if it will happen", these are things that will happen for sure, we just don't know when it will happen.

[Kemarit]

Well we've seen that institutional investors can pump the market already, so think if other investors suddenly sell their assets and move to bitcoin?

But to be honest, whether its from other assets or not, Bitcoin will still flourish, just a matter of time till we see trillion being poured on the market in the next several years. No need to question how much, it's the question of when and what will be the time frame, 5 years? 10 years?

[Poker Player]

Why do you think bitcoin is "absorbing" market cap from other assets?!!!
For example I myself never had any assets the first time I bought bitcoin and if I hadn't done that the money would have stayed in my bank account doing nothing. There are a lot of people who are cutting certain bad-expenses (eg. quit smoking) and putting that money into bitcoin because it is BITCOIN otherwise that money would have never made its way to any "asset".

Yes, but that is not the general rule. I for example used to invest in other things, and now only in Bitcoin. The bigwigs that are getting into Bitcoin are at least partially stopping investing in other assets and that is going into Bitcoin.

Additionally the places in the world where they treat bitcoin as a currency is increasing, specially among under-developed countries. As bitcoin adoption grows in these places and consequently the price rises they aren't absorbing the market cap from anywhere else.

Do you really believe that a quarter of all the wealth created in the world is going to be absorbed by Bitcoin?

That's the thing, you are thinking of bitcoin as an asset while it is actually a currency.
If there is indeed "around USD 420 trillion" in circulation then a unique global currency that works 24/7 so much faster and safer than all the 420 trillion combined should have a much higher value than the 420 trillion instead of only having 1/4 of it.

Yes, I have already realized that you are very clear that Bitcoin is going to end up being a currency. As of today it is not, and I am not so clear. By Greshan's law, as long as there are low value currencies, people will tend to keep the Bitcoin and spend fiat currencies or shitcoins. I discussed this once with mk4.

Then there is the theory that the Bitcoin will end up being everything, unit of account, store of value and currency, which I guess is your vision, but that is still to be seen.

I think the vast majority of us on this forum would agree that Bitcoin is better than gold as a store of value and that it would make sense to absorb its market cap. If we have Bitcoin with a market cap of about $1T and gold with a market cap of about $11T, we see it quite likely that Bitcoin in the not too distant future will have a $10T market cap and gold $2T.

And why do you think the so-called gold market cap will crash 5 times?

First thing is that half of that so-called market cap is not in gold that stays in some vault in a bank and is in jewelry, are we going to seriously see a drop in demand for jewelry just because bitcoin is a better store of value? The cheapest engagement ring still is above 2 grams, multiply that by the population of the earth and you end up at least 3 times the gold reserves of the united states, even if we assume half of the world population is way too poor to afford one there are plenty who would compensate for an entire region of the city.

But leaving that aside, in order for gold to lose 5 times that value it would need people to massively sell it and this is just like bitcoin, if you have people who believe in the value of something it doesn't make sense for them to sell so cheaply and 5 times below the price they've bought in. And now the most important part, how are you going to convince ordinary people who don't care that much about technology that something they know has value, something they knew for a long time and something it's advertised all over the world as being of value that is less valuable than a bunch of numbers in an app? Not to mention that you can't have bitcoin plated rims, no matter how much you try.

For it to absorb market cap, there does not have to be a gold market crash. Simply that people stop buying gold as a safe haven and buy Bitcoin instead, simply if what has happened over the last 12 years continues to happen, the price of gold has risen little or not at all if we take into account inflation and the price and market cap of Bitcoin have risen by a huge amount, as I say, simply with that, the market cap of Bitcoin can reach 5.5 times that of gold. It is a progressive process by which a person who has a coin worth $100 does not have to sell it for $20.

[hello_good_sir]

Seems about right.

Gold is definitely something that bitcoin can absorb 100%.

Not sure about real estate or stocks. They are just two entirely different asset classes. BTC, as good as it is, cannot ever replace a PPOR. And it doesn't carry on business - it's just a medium of exchange, and hence it can never replace stocks as well. Those are a bit far fetched.

[STT]

Gold wont be replaced by bitcoin for really simple reasons they are not in competition and neither product replaces the other.   That could be considered true with 30 seconds of reasoning, gold is an elemental part of the wider world which we happen to find useful in a monetary capacity at some times greater then others.   Right this moment, gold isnt largely used for currency we revolve around the dollar global reserve system and a reliance on debt which itself leans on politics and fiscal budgets.
   The greatest change in the world will be around the history of Bretton Woods agreement, leading to Nixon shock a quarter century later and present day 50 years on we are to witness the end of debt leveraged as a currency.   I dont know we steal market cap from anywhere except where gigantic failure is most likely, the debt that cant be repaid and that realization seems that most obvious point.   Interest rates at 5% instead of 0% we have would bankrupt most countries fiscal obligations, we are going to find out where that goes but BTC likely will be more used then.

[stompix]

For it to absorb market cap, there does not have to be a gold market crash. Simply that people stop buying gold as a safe haven and buy Bitcoin instead, simply if what has happened over the last 12 years continues to happen, the price of gold has risen little or not at all if we take into account inflation and the price and market cap of Bitcoin have risen by a huge amount, as I say, simply with that, the market cap of Bitcoin can reach 5.5 times that of gold. It is a progressive process by which a person who has a coin worth $100 does not have to sell it for $20.

Yes, it has to!

If we have Bitcoin with a market cap of about $1T and gold with a market cap of about $11T, we see it quite likely that Bitcoin in the not too distant future will have a $10T market cap and gold $2T.

Your own scenario says so, and unless people sell at 5.5 times less than the actual price there is no way how this could be achieved, not even mentioning that we have an average of 3000 tons of gold being mined each year which adds around 150 billion to the market cap every time. Just as the price of bitcoin will not go down if nobody sells the same will be with gold, and gold bugs are far more resilient than bitcoiners when it comes to holding.

[Poker Player]

For it to absorb market cap, there does not have to be a gold market crash. Simply that people stop buying gold as a safe haven and buy Bitcoin instead, simply if what has happened over the last 12 years continues to happen, the price of gold has risen little or not at all if we take into account inflation and the price and market cap of Bitcoin have risen by a huge amount, as I say, simply with that, the market cap of Bitcoin can reach 5.5 times that of gold. It is a progressive process by which a person who has a coin worth $100 does not have to sell it for $20.

Yes, it has to!

If we have Bitcoin with a market cap of about $1T and gold with a market cap of about $11T, we see it quite likely that Bitcoin in the not too distant future will have a $10T market cap and gold $2T.

Your own scenario says so, and unless people sell at 5.5 times less than the actual price there is no way how this could be achieved, not even mentioning that we have an average of 3000 tons of gold being mined each year which adds around 150 billion to the market cap every time. Just as the price of bitcoin will not go down if nobody sells the same will be with gold, and gold bugs are far more resilient than bitcoiners when it comes to holding.

No, not really. You didn't quote the last sentence, in which by the way I missed the "no" but I think it's clear from the context.

Note: I am not taking inflation into account here. If I talk about $5M it is with current prices, or the figure that will result in the future from multiplying that figure by inflation.

(I've added the "not" in bold)

So, if in the next 10 years what has happened in the last ten years happens, that gold rises just a little bit without counting inflation, but even loses if we count inflation, and bitcoin rises parabolically, it is more than feasible. You can find gold with $15T market cap and bitcoin with $85T maket cap perfectly well. The only thing is that the dollar will be worth much less in 10 years than it is now.

[stompix]

So, if in the next 10 years what has happened in the last ten years happens, that gold rises just a little bit without counting inflation, but even loses if we count inflation, and bitcoin rises parabolically, it is more than feasible. You can find gold with $15T market cap and bitcoin with $85T maket cap perfectly well. The only thing is that the dollar will be worth much less in 10 years than it is now.

Man, it's pretty simple.
You can't absorb anything from a community, company, people who own something if they don't want to.
If people owning bmws are selling bmws and buying again bmws no other company will get any of their market share, there will be no absorption of buyers. Same for gold, if people will not sell gold and buy bitcoin it doesn't matter if bitcoin goes 1 billion times up in price there was no absorption.

Your title was about people dumping other assets in favor of bitcoin, not about inflation, when you mention absorbing six times and inflation once I think it's pretty obvious what was intended to be discussed. And no, bitcoin will not absorb 80% of the money people have invested in gold!

[leea-1334]

I think the vast majority of us on this forum would agree that Bitcoin is better than gold as a store of value and that it would make sense to absorb its market cap. If we have Bitcoin with a market cap of about $1T and gold with a market cap of about $11T, we see it quite likely that Bitcoin in the not too distant future will have a $10T market cap and gold $2T. This would leave us with a price of $0.5M per Bitcoin.

Better I do not know,,, easier to own, easier to keep, easier to sell, yes. Gold keeps value much better than Bitcoin though, as it is more predictable and less volatile. Bitcoin over 5 and 10 years yes, but if you suddenly need to sell your BTC within 2 or 3 years of buying it, be prepared to sell at a huge loss. Hence not a store of value equal to gold, hence not much absorption from gold market cap.

[Lucius]

I think the vast majority of us on this forum would agree that Bitcoin is better than gold as a store of value and that it would make sense to absorb its market cap.

This is not strange considering that this is a Bitcoin forum, but we are still a very small community if we take into account the number of active members. The vast majority of people in the world have a very difficult or no understanding of Bitcoin, and it will take a long time for new generations to perhaps change the way people view gold compared to Bitcoin.

Do you really believe that a quarter of all the wealth created in the world is going to be absorbed by Bitcoin? If we were talking about absorbing a total of $40T, then I would probably see it as much more realistic, and taking a long time to get there, but I don't know if people who are into Bitcoin end up having some sort of clinical bias.

Because of what I've already written, I don't believe it's possible, at least not in the near future - but if Bitcoin survives for the next 10-15 years, I think it will be much better positioned by then and most people will understand it much better than they are today. Big changes never happen overnight, and 10 or 20 years is a very short period of time for people to reject or largely replace traditional ways of investing with something completely new.