The popular analyst and Bitcoin bull Tom Lee hints on a new price target for the dominant cryptocurrency. As the founder of Fundstrat said, Bitcoin will accrue a major price value following a similar logic to the Silicon Valley tech titans.
During an interview with CNBC for its Street Signs Asia show on November 15, Lee stated that cryptocurrencies are “network value assets” and share this with the most successful tech stocks in the world. With this, Tom Lee hints on a potential rally for Bitcoin which will see the cryptocurrency growing above its all-time highs of $20,000.
He made an argument when asked about the logic behind Fundstrat and its $25,000 forecast for Bitcoin by 2022. In the Bitcoin news, Lee also noted that the number was set in 2017 as part of a five-year forecast for the asset. He said that he still thinks it is “quite easy to achieve” this target and noted:
“Cryptocurrencies are network value assets, meaning the more people hold the asset, the greater the value. In fact, it’s a log function — so if you double the users hold it, you get a quadrupling of value. To go to $25,000 you essentially need a little less than 4x rise, which means you need to double the number of people who hold Bitcoin.”
Tom Lee hints on a new BTC high while saying that Fundstrat estimates that roughly half a million people own and use Bitcoin. Therefore, one would need to hit a million users to get a $25,000 valuation.
He noted that this is essentially a utility function, while drawing an analogy with the performance of FAANG (Facebook, Amazon, Apple, Netflix and Google) stocks since their public listing.
“70% of their return [since public listing] is explained by the growth of the global internet in that period of time. In other words, it’s a LOG function of the internet’s growth, and that’s how cryptocurrencies are going to work,” Lee stressed as his comments went viral in the crypto news.
When it comes to other factors, Tom Lee hints that he was very bullish on Bitcoin in the long term and that he thinks it is “still the earliest days for digital assets” – and over time they will become highly institutional and an established asset class.
“Once we hit that it’s another hockey stick,” he concluded.
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