Sub-$22K Bitcoin looks juicy when compared to gold’s market capitalization

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Institutional investors are exposed to $15.9 billion worth of Bitcoin, yet BTC price trades under $22,000. noshitcoins explains why Bitcoin’s pricing is a discount when compared to gold’s $11.2 trillion market capitalization.

) price is down 56% year-to-date, but the correction was not strong enough to remove the digital asset from the list of top-20 global tradable assets. Bitcoin’s current $400 billion market capitalization stands higher than traditional companies like Exxon Mobil, Walmart and Procter & Gamble, but there’s always the question of whether a direct comparison between a commodity like Bitcoin and equities is valid.

Measuring a commodity market value can be tricky. For example, in the case of silver, only 50% of precious metal is used in industrial applications. There are individuals and companies holding the asset for investment in the form of bars, coins, or jewelry and these are not"productive" revenue-generating assets.

Bitcoin’s value is vastly inferior to gold’s $11.2 trillion market capitalization, but what does “$400 billion” even mean, and how does it compare to broader asset classes such as global equities, real estate and debt markets?The first question one should ask is: Has gold been a good store of value over the past five years? To find answers, traders have to compare its price against other trillion-dollar asset classes like global equities, oil and real estate.

One could argue that gold has failed to sustain its purchasing power over time, but it’s likely that more time is needed to evaluate how the precious metal will behave if the current global crisis accelerates or extends longer than expected. Meanwhile, in this same time period, Bitcoin presented 840% gains from July 2017 to July 2022.There’s a valid question about Bitcoin’s volatility and rightfully so given the fact that the asset regularly faces 20% or higher weekly price moves.

strategy consists of regularly buying pre-set amounts of an asset on a daily, weekly or monthly basis.For instance, following this strategy for the past five years would have resulted in an $19,192 average entry cost. So even if the 8.3% gain to the current $20,800 price might not be enough to compete with gold, it certainly shows a more predictable form to use Bitcoin as a long-term store of value.to CryptoCompare, the Bitcoin investment vehicles under management totaled $15.9 billion in June.

 

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