TL;DR

• Fidelity Digital Assets published a study asserting that Bitcoin is better than digital gold and could reach a price of $676,000 or more.
• Key findings include: Bitcoin’s unique status as a monetary good and store of value, its scarcity and fungibility similar to gold, and its improved portability and programmable properties.
• If Bitcoin surpasses gold’s market cap, based on the current mined supply, its value could be around $676,000 per BTC, nearly 24 times its current price of $28,400.

Fidelity Digital Assets recently published a Bitcoin study conducted in September. The cryptocurrency arm of the $4.5 trillion financial giant is very bullish for Bitcoin over the long term.

Here are some of the implications of Fidelity’s study for Bitcoin price.

Fidelity Digital: Bitcoin is like digital gold

Among the key findings and conclusions of the study are:

• Bitcoin is a monetary good and store of value asset in a class all its own.
• Bitcoin price is based on the “most secure, decentralized, sound digital money.”
• No improvement upon Bitcoin by competitors is possible without necessary trade-offs.
• Bitcoin is a scarce digital good with an inflation rate on par with gold’s.
• Bitcoin price is driven by its scarcity and fungibility, which are like gold. But its portability and programmable properties make it even better than gold.

Chris Kuiper, Fidelity Digital’s director of research and research analyst Jack Neureuter authored the study. They make the case that Bitcoin is an entirely unique asset class but that it combines the best of gold and digital assets.

The digital gold thesis goes all the way back to the seminal Bitcoin white paper by Satoshi Nakamoto:

“The steady addition of a constant of amount of new coins is analogous to gold miners expending resources to add gold to circulation. In our case, it is CPU time and electricity that is expended.”

The Fidelity study’s ultimate conclusion is Bitcoin is a unique asset class and even better than gold as a long-term store of value.

If it’s Like gold, Will Bitcoin Price go to 6,000?

The Fidelity team proposes in their paper that “Bitcoin’s value is driven by its enforceable scarcity.” Furthermore, they point out Bitcoin price’s inflation rate is right on par with gold prices:

“Not only is bitcoin scarce (bitcoin’s current inflation rate of about 1.8% is roughly equal to gold’s inflation rate at the moment), but unlike gold, it is also provably finite. There will only ever be 21 million bitcoin.”

Gold’s global market cap is currently somewhere in the neighborhood of $13 trillion for just over 200,000 above-ground metric tons of gold:

“The amount of above ground reserves for Gold are estimated to be around 205,238 metric tonnes according to the World Gold Council…”

If Bitcoin were to someday overtake gold in market capitalization, based on the Bitcoin supply of some 19 million bitcoins that have been mined, it could fetch a price as high as $676,000 per 1 BTC.

At a recent Bitcoin price of $28,400, that would be nearly 24X the current value of the world’s original cryptocurrency. In the near to mid-term, here are six important factors in BTC’s price.