Bitcoin is about to surpass Berkshire Hathaway's market cap at $531 billion
|Dec 27, 2020||5|
This is a brief letter on the broader picture of Bitcoin and where it might be heading in the next five to ten years. - Joseph Young
The price of Bitcoin is surging. Its market cap is now hovering above $514 billion as the BTC price hit $27,800.
In doing so, it is close to overtaking Berkshire Hathaway’s market cap at $531 billion.
The weekly chart of Bitcoin versus Berkshire Hathaway. Source: TradingView.com
Comparing a decentralized blockchain network and a store of value to a for-profit conglomerate might sound weird.
But think of this, it shows how fast Bitcoin is growing and at the same time, it also shows how early it is in its growth phase.
Bitcoin’s valuation sank to around $74 billion during the March crash. At the start of the year, it was at around $130 billion. So, it has increased by four-fold and institutions are clearly taking notice of that.
At the same time, Bitcoin is only valued at $531 billion. If we consider the potential trajectory of Bitcoin, $531 billion is not high at all.
Let’s look at some potential numbers.
If Bitcoin takes 10% of gold’s market cap, it would be valued at $900 billion or $48,433.
As Arcane Research CIO Eric Wall said, Bitcoin could also take a share of the $40 trillion global narrow money in circulation. Just 5% of this would be $2 trillion, which would value Bitcoin above $107,000.
If Bitcoin takes 1% of the $250~$300 trillion real estate market, that would mean a $2.5 trillion market cap or a price of $134,536.
The Winklevoss twins famously laid out the case for a $500,000 Bitcoin, if it overtakes gold as the premier safe-haven asset.
Bitcoin is in an ideal position where it is big enough for institutions to consider allocating their assets but small enough to see an exponential and parabolic bull run over the next decade.