Bitcoin is maturing from a "speculative risk asset" to a "global digital store-of value," according to Bloomberg research.
A Bloomberg Intelligence report released this week pegged $100,000 as a "key threshold" for the price of Bitcoin. The cryptocurrency could eclipse that six-figure mark before the end of 2021, in Bloomberg's estimation.
"The process of Bitcoin replacing gold in portfolios is accelerating," wrote Mike McGlone, Bloomberg Intelligence senior commodity strategist.
Bloomberg Intelligence is an investment research arm of Bloomberg.
Bloomberg found that institutions that have traditionally maintained heavy gold exposures as both a hedge against inflation and a store of value have been increasingly snapping up Bitcoin to diversify their investment portfolios.
The price of one Bitcoin is trending toward being worth 100-times the price of an ounce of gold, compared to a tenfold multiple prior to 2017, McGlone estimates.
Gold held by exchange-traded funds has been falling since last November, according to the report. This stands in contrast to the Bitcoin-denominated market value of the Grayscale Bitcoin Trust (GBTC), which has risen steeply in the last year, according to the report.
The Grayscale Bitcoin Trust, which allows accredited investors to acquire units and then sell them on the secondary market after a lock-up period, has historically traded at a premium to the Bitcoin price. It traded at a discount of 2.7% to Bitcoin in February, according to Bloomberg Intelligence.
The GBTC discount could signal the conditions for another Bitcoin rally, this time to $100,000. According to McGlone, earlier instances when the GBTC premium was low coincided with strong Bitcoin rallies.
Case in point: March 2017, when GBTC traded at a slight discount to the Bitcoin price of about $1,000. Bitcoin went on to hit nearly $20,000 at the end of the year.
"Sharp reductions in the GBTC premium have often marked bottoms in Bitcoin," McGlone wrote.