PANews, December 13 news, 10x Research published an article on the X platform titled "Optimal Bitcoin Allocation in a Multi-Asset Portfolio". The article states that, contrary to popular belief, the price of Bitcoin is driven by demand rather than changes in its (mining) supply. Each of the five bull markets in Bitcoin has been driven by innovations in the way investors acquire Bitcoin - from the creation of early spot exchanges, to the use of futures, uncollateralized lending, spot Bitcoin ETFs, and now options on these ETFs. This progress highlights the increasing integration of Bitcoin with traditional financial markets, and approvals from regulators such as the US CFTC and SEC have accelerated this trend, as these agencies have legalized financial products related to Bitcoin over time.
Bitcoin has played a key role in consolidating its identity as "digital gold" by prioritizing decentralization over increasing transaction throughput. This classification provides a framework for traditional financial investors to understand Bitcoin's role in portfolio management, as a risk mitigation tool, or as digital gold to hedge against inflation. It also provides insights into Bitcoin's potential valuation trajectory. The total value of above-ground gold is around $18 trillion, of which $8 trillion is used in jewelry - an area that Bitcoin is unlikely to replace.
However, Bitcoin may capture a portion of the $4 trillion in private investment (bars and coins), the $3.1 trillion in central bank reserves, and the $2.7 trillion in other uses such as industrial applications and holdings by financial institutions. This $10 trillion gold market segmentation represents Bitcoin's potential target. Considering Bitcoin's current market valuation of $2 trillion, this suggests that it has the potential to grow by 5 times as it continues to position itself as digital gold. There are significant differences in the ownership of gold and Bitcoin. Around 1 billion people own gold jewelry, and another 150 million hold it as an investment, either directly through bars and coins or indirectly through financial instruments such as ETFs.
