With Bitcoin reaching a new all-time high above $40k and a market capitalization of approximately $700 billion, it is now roughly 7% of the market capitalization of gold, which is estimated at $10 trillion dollars as at press time. If one considers that Bitcoin has been consistently described in some circles as digital gold, this milestone should not be taken for granted.
Forbes.com
Following the suspension of the gold standard by world governments, Bitcoin evangelical groups are already pushing for the emergence of Bitcoin as the new reserve currency; some even arguing that Bitcoin will sooner than we expect flip gold.
Therefore, considering that Bitcoin has a limited supply of 21,000,000 coins and institutional investors are picking strong interests in the digital asset, the arguments of the Bitcoin protagonists may not be far from the truth. That is, Bitcoin might flip gold by the next two halving events away or thereabouts.
Perhaps another important factor to consider is the level of correlation between Bitcoin and gold. At the beginning of this Bitcoin bull cycle, only some months ago, Bitcoin had what seemed like a direct correlation with gold. However, since Bitcoin started this upward surge, almost a zero correlation has been observed between Bitcoin and gold so far.
Perhaps, one of the logical assumptions that can be made from the above observation is that there is a possible flow of money from gold into Bitcoin. And if this assumption is true, the trend is most likely to continue well into when we see the peak of the bull market.
This position makes more sense when you realize that, to a large extent, Bitcoin and gold share some large investors. It is likely that more investors will cash out their bags of gold and invest in Bitcoin due to the rising reputation of Bitcoin as a store of value and a possible reserve currency of the future. By the time Bitcoin ultimately flip gold, there is no question that it will be a case of six digits figures per one Bitcoin.