Bitcoin surpasses Silver in Market Cap: Will it hit 100k?

Bitcoin, the world’s most prominent digital currency, reached a historic milestone this Monday, with its market capitalisation surpassing that of silver. The cryptocurrency soared to a value of $1.75 trillion, pushing past silver’s $1.732 trillion and solidifying its position as the world’s eighth-largest asset. 

This remarkable achievement came as Bitcoin’s price surged to $89,560 before easing slightly. With an impressive 9% jump on the day, driven by strong institutional interest and growing momentum in spot Bitcoin exchange-traded funds (ETFs), Bitcoin’s rally continues to capture investor attention worldwide.

Outpacing Silver: A second triumph in 2024

This marks the second time Bitcoin has outperformed silver’s market cap in 2024, with the previous instance occurring in March. While silver, traditionally viewed as a stable store of value, has faced a 6.24% decline over the past week, Bitcoin has climbed by approximately 30% over the same period and has now flipped even the Vanguard Total Stock Market ETF. 

Screenshot of Bitcoin market cap compared to Silver market cap. Source: Infinite Market Cap

This rapid appreciation reflects a shift in investor sentiment as Bitcoin garners acceptance among mainstream and institutional investors. With its appeal increasingly likened to precious metals like silver, Bitcoin is evolving from a speculative asset to one recognized by traditional markets as a viable store of value.

A new era of institutional support and political optimism

The recent U.S. elections, which resulted in a favourable outcome for pro-crypto lawmakers, have added to the wave of optimism surrounding Bitcoin’s potential regulatory support. Analysts suggest that the political climate, coupled with sustained institutional demand, is reshaping Bitcoin’s role in the financial landscape. Chris Chung, CEO & co-founder of Solana DEX aggregator Titan, observed that Bitcoin’s bullish momentum “shows no signs of stopping.” He attributes this trend to increasing investor confidence in Bitcoin as a “safe asset” amidst market volatility.

Further emphasizing this shift, Lukas Enzersdorfer-Konrad, Deputy CEO of Bitpanda, noted that Bitcoin’s rise can be attributed to a mix of favorable conditions, including:

• Political stability: Reduced election uncertainty and pro-crypto promises by incoming U.S. leadership.

• Institutional capital: Record inflows from ETFs and major capital markets.

• Interest rates: Declining interest rates driving investors toward alternative assets.

• Retail demand: A significant increase in demand from retail investors who are driving the current price momentum.

Broad market impact of Bitcoin’s rally

Bitcoin’s upward trajectory has reverberated across adjacent markets. As retail and institutional investors alike seek high-beta investment options, the broader “Bitcoin Industrial Complex” — a term describing assets tied to Bitcoin, including spot Bitcoin ETFs, MicroStrategy, and Coinbase — saw record trading volumes this week. 

According to Bloomberg ETF analyst Eric Balchunas, this index achieved a record $38 billion in trading volume. Coinbase and MicroStrategy’s stocks each reached multi-year highs, with Coinbase closing at $334.24 and MicroStrategy breaking its own record above $351.

Bitcoin’s market cap now trails only seven global assets: gold (with a $14.7 trillion market cap), followed by major technology giants such as NVIDIA, Apple, Microsoft, Alphabet, Amazon, and Saudi Aramco. While gold remains over ten times larger than Bitcoin in market capitalization, analysts believe the scarcity narrative surrounding Bitcoin — with its fixed supply of 21 million coins — will continue to attract investors looking for a hedge against traditional market uncertainties.

As the Kobessi letter, a popular financial newsletter, recently noted, “The fact that gold is still 10 times larger than Bitcoin is incredible. Not only does this show how big gold is, but it also shows how big Bitcoin can be.” Analysts believe Bitcoin’s growth potential, coupled with its finite supply and increasing acceptance, may drive it to climb even higher on the list of global assets.

Technical outlook: On the road to 100K? 

Looking ahead, experts remain optimistic about Bitcoin’s price potential. Financial influencers and market analysts project that Bitcoin could reach six figures by 2025, particularly as the demand for Bitcoin ETFs continues to grow. Wendy O, a popular influencer, stated her belief that the finite nature of Bitcoin will continue to drive demand, calling Bitcoin’s recent achievements “just the beginning.”

The asset is now inching towards 90K with upward momentum strong on the daily chart. However, price touching the upper Bollinger band as RSI towers past 70, hints at overbought conditions- which could lead to a correction. 

Buyers could face a hurdle at the upper Bollinger band, while sellers could find support at the $75,000 and $71,200 price levels.

Source: Deriv MT5