If bitcoin becomes the ‘hardest asset,’ it will surpass $600,000 in value.

According to Capriole Investments, the future decade might see Bitcoin replicate gold’s 1970s breakouts.

Bitcoin is expected to replicate gold’s stunning 1970s breakout by becoming the world’s “hardest asset” in 2024.

That was one of the forecasts in the most recent issue of the Capriole Newsletter, a financial circular published by research and trading business Capriole Investments.

Despite BTC price action being approximately 80% below its most recent all-time high, not everyone is pessimistic about even the medium-term future.

While there are still demands for a further dip before BTC/USD hits its new macro bottom, Capriole feels that 2023 will be a good year for Bitcoin as a reserve asset.

The cause, it claims, is found in the world economy’s financial history over the last century, particularly in the United States after the dollar was entirely deanchored from gold in 1971.

Gold, the world’s prime safe haven at the time, enjoyed “massive” growth during the decade, and now it is Bitcoin’s turn fifty years later.

“Because gold was considerably smaller in the 1970s (and Bitcoin now is even smaller in comparison), it had the opportunity to make significant changes during a decade of inflation and high interest rates,” explains the author. Capriole stated:

Meanwhile, when it comes to Bitcoin competing with gold for the safe haven crown, the potential is in the numbers — at only 2.5% of gold’s market cap, BTC’s 80% drop from its $69,000 peak last year has little impact on the overall picture.

“Given that Bitcoin currently represents only 2.5% of gold’s market capitalization, its 80% downturn adds only 2% to the combined hard money (gold + Bitcoin) drawdown,” the report stated.

“Giving a total hard money drawdown of 24% through November 2022, equal to gold figures from 1970 and 1975.”

If the stage is already prepared for a Bitcoin copycat move of 1970s gold, the growth potential is all the more astonishing — even now, Bitcoin’s market cap is only 10% that of gold before its bull run began.

“Bitcoin has more growth potential than gold since it is smaller. Like-for-like demand in both assets will result in a 40X price change for Bitcoin, according to Capriole.

“The world’s toughest asset”

Another important point was one that was previously supported by observers like Saifedean Ammous in the well-known book The Bitcoin Standard.

There, the discussion centers on investors switching to Bitcoin if its inflation rate falls below that of gold, boosting its monetary “hardness” in comparison to the metal:

“There are other more characteristics that distinguish Bitcoin from gold, including its equitable decentralization, capacity for instantaneous transfers, and suitability for small-scale payments. Most critically, however, Bitcoin is more durable than gold.
This will solidify Bitcoin as “the hardest asset in the world,” Capriole continued, with its upcoming block subsidy halving in 2024.

Overall, gold increased 24X in the 1970s, according to Capriole.

“Now imagine the 2020s, where we have digital, accessible, tougher money: Bitcoin and the Fed can’t afford to be as aggressive (debt is considerably greater today).”