On October 13, the market cap of Bitcoin surpassed that of Goldman Sachs after a meteoric rise in the past three days. With a market cap of $95 billion, Bitcoin surpassed Goldman Sachs by more than $3 billion.
Goldman Sachs, the second largest investment bank in the world, has sustained a market cap of $92 billion throughout the past 12 months but has struggled to demonstrate an increase in growth in terms of market cap.
Since January of 2017, the market cap of Bitcoin increased from $15 billion to $95 billion, while the market cap of Goldman Sachs remained relatively stable at just over $90 billion.
Surpassing Market Cap of Goldman Sachs was a Major Milestone, Potential Targets
Surpassing the market cap of Goldman Sachs was a major milestone for Bitcoin and it is rapidly approaching towards the $100 billion mark. But, while Goldman Sachs is the second largest investment bank in the global finance sector, Bitcoin still needs to overtake large retail and commercial banks such as Citigroup and JPMorgan, which are valued at $159 billion and $350 billion respectively.
In order for the market cap of Bitcoin to surpass that of JPMorgan at $350 billion, the price of Bitcoin needs to reach around $25,000, which happens to be the interim target of many prominent and highly regarded analysts including Tom Lee, a Wall Street strategist and Fundstrat Global Advisors co-founder.
On CNBC’s Fast Money, Lee emphasized that he sees the Bitcoin price reaching $25,000 by 2022, after refuting claims from bank executives such as JPMorgan CEO Jamie Dimon that Bitcoin “is a bubble.” Lee stated:
“There are only about 300,000 holders of at least $5,000 of bitcoin. That is like saying the iPhone was a bubble in 2007 four days into the sale because there were 500,000 iPhones sold. Bitcoin is a protocol. Meaning, the actual network itself is generating the value so that the Visa of bitcoin is not going to be as valuable as the blockchain network itself. And that is why, for instance, to make a fraudulent transaction on bitcoin today, it would cost almost $30 billion to create one fake bitcoin.”
Bitcoin is its Own Economy and Financial Network, its Rise in Value is Proving That
As Bank of Finland explained in its latest research paper, Bitcoin operates its own economy and decentralized financial network. It does not require the presence and involvement of intermediaries and third party service providers such as banks.
At first, banks like JPMorgan and Goldman Sachs dismissed Bitcoin due to its premature market. But, as the demand for Bitcoin from general consumers, institutional investors, retail traders, and bank clients rapidly increased, even major banks like Goldman Sachs moved toward embracing the digital currency.
Last month, Paul Vigna of The Wall Street Journal, revealed that Goldman Sachs is preparing to launch Bitcoin trading, to address the increasing demand for the cryptocurrency. He wrote:
“Goldman’s effort involves both its currency-trading division and the bank’s strategic investment group, the people said. That suggests the firm believes bitcoin’s future is more as a payment method rather than a store of value, like gold.”
As the global demand for Bitcoin increases and major markets such as Japan demonstrate a rapid growth rate, the Bitcoin market will continue to outperform most assets and currencies.