Bitcoin tipped to rally 45pc as it mimics gold

Bitcoin’s transformation has long been predicted by its most fervent supporters. For years now they’ve argued it was digital gold in the making. Has that time finally arrived?

Institutional adoption of bitcoin is gaining momentum. Picture: AP

Bitcoin is beginning to look a lot like gold.

This isn’t to say the digital asset has entirely shaken off its volatility or proved its role as a reliable store of value. It hasn’t, not yet. But there is growing evidence that investors, particularly institutional ones, are beginning to treat it less like a speculative token and more like a strategic asset. That change in perception may be just as significant as any price movement.

But price movement will also be significant. Global X ETFs is forecasting bitcoin to reach $US200,000 over the next 12 months, should current conditions persist. On Thursday, it traded at $US109,323, a gain of 82 per cent over the past 12 months.

Bitcoin’s transformation has long been predicted by its most fervent supporters. For years now they have argued it was digital gold in the making.

Gold is a non-sovereign, liquid asset that has maintained its value across centuries. It holds no allegiance to any nation and is not vulnerable to the same economic missteps that can undermine fiat currencies.

Bitcoin shares many of these qualities. It is not issued by any government, cannot be devalued by monetary policy, and its supply is fixed at 21 million units. In theory, it should function in much the same way as gold. That is, as a hedge against uncertainty and as a ballast in a portfolio when traditional assets come under pressure.

Until recently, however, that theory was largely aspirational. Wild price swings, unclear regulation, and speculative trading cycles kept it on the periphery of serious asset allocation frameworks. Bitcoin’s historical correlation to growth assets, particularly high-beta technology stocks, made it unsuitable as a risk-off hedge. Investors would often see it fall alongside equities in market sell-offs, undermining claims of its “safe haven” potential.

But a confluence of recent developments is starting to blur those boundaries.

First and most importantly, institutional adoption is gaining momentum. The launch and rapid uptake of bitcoin exchange-traded funds offers a gateway for large investors to access the asset with less friction.

Global X ETFs investment analyst Justin Lin. Picture: Supplied.

Over the past three months, net inflows into bitcoin ETFs have exceeded $US11bn ($16.7bn), a dramatic reversal from earlier periods of the year when outflows dominated the sector.

It is a sign that large allocators are beginning to treat bitcoin with the same level of due diligence and discipline they apply to traditional asset classes. And as institutions move in, they tend to bring a dampening effect on volatility. Trading becomes less speculative, price discovery more efficient, and the investor base more stable.

This stabilisation may be bitcoin’s most important evolution. Gold’s value is not only in its scarcity or its history, but in the confidence markets place in its behaviour. Investors turn to gold because they believe others will do the same in times of crisis. That belief, sustained by decades of experience, reinforces itself. Bitcoin has not yet earned that level of trust, but growing institutional participation is laying the groundwork.

Alongside the institutional story, political re-engagement with crypto is providing a tailwind. The passing of GENIUS Act, a US bipartisan bill aimed at setting guard rails for stablecoins, is an important step towards regulatory clarity. It signals that politicians are beginning to treat the digital asset sector as something to regulate constructively rather than suppress. Other political signals, such as the Trump administration’s renewed courting of the crypto community, may further boost sentiment.

What makes this moment particularly interesting is the broader macroeconomic context. There is a growing sense that the era of unchallenged US monetary dominance is fraying at the edges. While talk of de-dollarisation is often exaggerated, capital is beginning to explore alternatives, particularly as geopolitical fragmentation and fiscal strain raise questions about the long-term stability of the dollar. Bitcoin, like gold, may offer an escape valve. It does not rely on trust in any government or institution. That independence is becoming more relevant in an increasingly multipolar world.

Of course, none of this makes bitcoin risk-free. Crypto investors are often subject to regulatory uncertainty, speculative excess, and political whims. And while bitcoin’s volatility has declined over the years, it is still well above that of gold or developed market currencies. But it is precisely because of those risks that the shift towards treating it more like gold is so notable. The investment community is not blind to bitcoin’s flaws, and many are beginning to see its potential.

The rationale for our price forecast (that bitcoin could plausibly reach $US200,000 over the next 12 months) is straightforward. A risk-on market environment, surging ETF inflows, and growing political support could create a backdrop of strong, sustained demand against a backdrop of fixed supply. In a market governed by scarcity and sentiment, such a price move is not out of the question.

To reiterate, the road ahead is still uncertain. In Global X’s view, we are still a time away from classifying bitcoin as a “safe-haven” asset and it is possible that this narrative fades again, or that policy crackdowns in key jurisdictions dampen momentum. Yet it is equally possible that, with time and continued adoption, bitcoin could become a permanent fixture in global asset allocation.

One thing is for certain – bitcoin’s claim to be digital gold is no longer as far-fetched as it once seemed.

Justin Lin is an investment analyst at Global X ETFs.