The connection between gold and Bitcoin (BTC) as a store of value is obvious, and demand for BTC as a digital store of value has been a key reason for the cryptocurrency’s growing popularity, crypto services provider Matrixport said in a report on Monday.
Bitcoin’s market capitalization is $540 billion, which is 10.8% of the market capitalization of physical financial gold, Matrixport said, adding that gold exchange-traded funds (ETFs) are worth $200 billion.
That’s why the potential approval of a U.S.-listed spot Bitcoin ETF by the Securities and Exchange Commission (SEC) could lead to inflows of $20 billion to $30 billion, potentially sparking a major rally in the cryptocurrency, it said Report.
The SEC has been hesitant to approve a spot Bitcoin ETF, announcing in August that it would delay its decision on any new applications until October. The crypto market hopes that such approval will trigger a flood of mainstream funds into the sector.
Still, Bitcoin has an advantage over gold because the private keys can be stored, eliminating the risk of confiscation, the report said.
“Already today, storing assets in the form of gold has not only gone out of fashion in the digital age, but also entails significant restrictions when crossing borders,” wrote Markus Thielen, head of research at Matrixport, adding: “Bitcoin offers one for this Solution. “Dilemma that enables the quick and relatively inconspicuous transport of valuables across borders.”
“Given the current state of technological development, Bitcoin is therefore likely to function primarily as a store of value similar to gold and as a speculative financial asset,” the report continued.
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