Bitcoin at $45,000 looks cheap compared to gold's market cap

BTC’s market cap is much smaller than gold, but Bitcoin’s daily trading volume and the number of funds under management suggest that BTC is trading at a substantial discount.

Bitcoin (BTC) has had a double-digit rally this year, but BTC has struggled recently to break above the $45,000 resistance. This level has no historical significance as it can easily be breached multiple times. The same goes for Bitcoin’s $850 billion market cap, which is a far cry from silver’s $1.4 trillion or Amazon and Google’s $1.7 trillion.

Bitcoin’s market capitalization is often compared to gold, which has a combined value of $12.3 trillion and is currently the world’s leading store of value solution. Therefore, the answer to the $45,000 resistance level may lie in institutional investors comparing BTC to gold. By looking at the assets under management and the daily trading volume of institutional investor funds, it can be deduced that a 93% discount to Bitcoin’s market capitalization is reasonable.

The 'digital gold' theory turns out to be correct

Gold has long been seen as the face of Bitcoin, with Cointelegraph previously reporting on multiple use cases for Bitcoin, but the claim that it is a digital store of value has been its flagship feature.

Governments around the world have imposed tighter financial controls for a number of reasons, which could strengthen the autonomy and decentralization advantages of cryptocurrencies.

More recently, Canada's Emergencies Act on February 15 gave financial institutions the discretion to freeze protesters' bank accounts without civil liability. In another example, Russians were sanctioned this week by payment services like Apple Pay and Google Pay.

These events may make it even more important to analyze gold’s impact on Bitcoin’s market cap.

Bitcoin at $45,000 looks cheap compared to gold's market cap

Most Valuable Global Tradeable Asset Source: 8marketcap.com


According to the above data, BTC’s current market value of $837 million is equivalent to about 7% of gold. To assess how these markets are valued, one should compare their daily trading volumes and institutional holdings.

Cryptocurrencies are known for inflated exchange trading figures, but some providers, including Nomics, have their own adjusted volume calculations.

Bitcoin at $45,000 looks cheap compared to gold's market cap

Cumulative 30-day volume on March 2, USD Source: Nomics


The above data shows that Bitcoin’s 30-day trading volume was $404 billion, equivalent to $13.5 billion per day. Exchange-traded products such as the Grayscale Bitcoin Fund (GBTC) added $400 million in daily liquidity, according to a February 2022 report by CryptoCompare. As a result, Bitcoin’s current daily average trading volume totals $13.9 billion.