Bitcoin's Market Potential Could Surpass Gold Amid Iran Crisis, Says Bitwise Executive
Matt Hougan of Bitwise indicates that Bitcoin's total addressable market may outgrow gold's market capitalization should the cryptocurrency successfully establish itself both as a value preservation asset and a medium of exchange, which could drive prices significantly upward.
The total addressable market for Bitcoin could eventually eclipse the $34 trillion gold market if the cryptocurrency gains widespread adoption as both a medium of exchange and a wealth preservation vehicle, as indicated by Matt Hougan, who serves as chief investment officer at Bitwise.
In a statement released on Tuesday, Hougan noted that although Bitcoin (BTC) has traditionally been positioned as a rival to gold, recent developments in the Iran conflict have demonstrated that Bitcoin can also function in a "currency-like manner," pointing to Iran's announced strategy to collect tolls payable in cryptocurrency for vessels passing through the Strait of Hormuz.
"In a world where countries have weaponized their financial rails, Bitcoin is emerging as an apolitical alternative," Hougan said.
"It tells you that Bitcoin's total addressable market is probably a lot bigger than the… gold market alone."
In earlier forecasts, Hougan indicated that should Bitcoin secure merely 17% of the store-of-value market within the coming decade, its price could climb to $1 million per coin. Assuming a position as a globally recognized currency would presumably drive valuations considerably higher.
"If Bitcoin starts to take on a dual role as both a store of value, like gold, and an actual currency, like the dollar, we may need to revise our targets higher."
Current market data from CoinGecko shows Bitcoin exchanging hands at approximately $74,500 with a total market capitalization sitting at roughly $1.4 trillion. Meanwhile, gold is currently priced at $4,854 per ounce, with its overall market capitalization estimated to exceed $33.7 trillion as of Wednesday.
Bitcoin has already established itself as a wealth preservation tool for individuals residing in nations experiencing high inflation rates.
Populations across Argentina, Turkey, and Venezuela have endured ongoing inflation crises and currency devaluations, leading significant numbers of citizens to adopt Bitcoin as a means of safeguarding their wealth.
According to a survey conducted by Coinbase in January, 87% of Argentinians identified crypto and blockchain technology as mechanisms to improve their financial autonomy, while approximately three out of every four participants viewed cryptocurrency as an answer to problems including inflation.
Corporate adoption of Bitcoin has also accelerated among businesses seeking to strengthen their balance sheets.
Data compiled by BitBo shows that private and public companies together possess more than 1.5 million Bitcoin worth in excess of $116 billion.
Beyond serving as a store of value, Bitcoin's role as a payment mechanism has expanded considerably, with academic publishing firm Springer Nature documenting approximately 11,000 merchants worldwide, utilizing BTC Map data, that presently accept Bitcoin as a valid form of payment.