Analysis: Bitcoin's potential market vastly exceeds gold's $30T+ valuation
Recent macro analysis of Bitcoin reveals its potential market scope has exceeded gold's $38 trillion valuation, fueled by global political tensions and economic sanctions.
The potential market for Bitcoin (BTC) appears to be "probably a lot bigger" than the $30 trillion valuation currently held by gold, according to a leading cryptocurrency sector executive.
Key points:
- Matt Hougan of Bitwise believes Bitcoin will continue outperforming assets during times of geopolitical turmoil.
- The "addressable market" for Bitcoin has the potential to exceed the approximately $40 trillion market capitalization of gold.
- Following an unprecedented decline against gold, one analyst anticipates Bitcoin's return to the $90,000 level.
Gold's target market "probably" surpassed by Bitcoin
Matt Hougan, who serves as chief investment officer at cryptocurrency asset management firm Bitwise, shared his views in a Tuesday X post, suggesting that international political tensions will drive future BTC price appreciation.
He observed that "Bitcoin has performed well since the start of the Iran conflict."
"Since U.S. and Israeli airstrikes began on February 28, bitcoin is up 12% while the S&P 500 is down 1% and gold has fallen 10%."
Data from TradingView shows Bitcoin climbed to $76,000 during the current week, reaching its highest point in two months thanks to a blend of easing US-Iran military tensions and lower-than-expected US inflation data.
Hougan remarked that "This has caught many off guard. Bitcoin is a risk asset, and many assumed it would fall during a risk-off geopolitical shock."
"Pundits have grasped for explanations: Some have argued that geopolitics is irrelevant for bitcoin, while others have pointed out that war often leads to money printing, which tends to boost bitcoin in the long term. Both arguments are wrong."
According to Hougan, the characteristics of recent international conflicts — particularly Russia's exclusion from the SWIFT payment network in 2022 — have strengthened Bitcoin's position as an "apolitical alternative."
He explained, "I mused at the time that the weaponization of SWIFT might one day open up space for bitcoin: If countries grew reluctant to deal in dollars, it stood to reason that they might prefer an apolitical alternative at some point."
Currently, with Iran facing both economic sanctions and an oil embargo, while collecting cryptocurrency tolls for passage through the Strait of Hormuz, this "weaponization" pattern continues to gain momentum.
His post concluded by stating, "This framing tells you two important things about bitcoin's future."
"First, it tells you that bitcoin is likely to rise during future geopolitical conflicts — particularly if they occur in regions trapped between the US and Chinese systems. And second, it tells you that bitcoin's total addressable market is probably a lot bigger than the $38 trillion gold market alone."
Gold versus Bitcoin comparison yields $90,000 BTC price projection
When measured against gold, Bitcoin is presently bouncing back from a decline to its weakest position since the middle of 2023.
The recovery has proceeded at a gradual pace, despite Hougan forecasting the conclusion of the ongoing "crypto winter." However, certain analysts believe the indicators point toward a significant shift to bullish momentum.
Crypto trader Michaël van de Poppe shared his own analysis via an X post, forecasting that "mean reversion" for Bitcoin was simply a question of timing.
He observed that "The recent correction of $BTC vs. Gold is the heaviest in the history of Bitcoin."
"Comparing this to historical events, the average return after 12 months was 350-450% from this point. That means, from here an increase from $60,000 to $275,000. In 3 months time, it's very likely that we'll be trading at $87,500-90,000."
Drawing comparisons to patterns following previous drawdowns, Van de Poppe stated that the "moral of the story" centered on the strategy to "buy the dip" when it comes to BTC.
He maintained that "This is the general moment every cycle that you'd want to get allocated into an asset."