The market has it wrong!
At least according to Tom Lee.
Tom Lee of Fundstrat Global Advisors, says that the crypto market, and specifically the bitcoin market, has it wrong.
Yes yes, the market is never wrong, it is the market, ie the collective opinions and actions of all participants.
More about it can be seen here:
https://cointelegraph.com/news/fundstats-tom-lee-says-fair-value-of-bitcoin-to-reach-150k-per-coin
Tom Lee is smart enough to understand all of that, so what does he mean exactly?
Well Mr. Lee has been following bitcoin for the past few years and has been looking at historical patterns and trends since it's beginnings.
One thing that he has come to understand is that bitcoin, historically, has traded at certain levels based on number of bitcoin wallets, wallet activity, and then of course supply.
Taking all of those things into account, bitcoin should be valued around $13,800-$14,800 according to Lee.
Lee also noted that bitcoin traditionally trades for about 2X the cost of mining, which has been stated to be around $6k globally, which would also give a price of about $12k.
Based on Visa's valuation per account, if bitcoin were to get to just 7% of 4.5 billion accounts, each bitcoin should be worth roughly $150,000 per coin.
Wowza!
It gets better...
Lee noted that bitcoin currently has about 50 million active wallets compared to the 254 million paypall accounts and the 4.6 billion Visa and MasterCard accounts.
If you compare bitcoin to these other payment networks in terms of value, bitcoin could, in theory, be worth something like $10 million per coin in a decade or so.
Say what?
Yes you read that right, if bitcoin catches on as a payment method and captures the value currently held by PayPal and major credit card companies, bitcoin would be worth $10 million per coin.
Well, that prediction officially takes the cake as far as anything I have ever heard.
If he is even fractions right, we will all be very happy.
Stay informed my friends.
Image Source:
https://www.coinspeaker.com/tom-lee-bitcoin-price-13800/
Follow me: @jrcornel
The value is always growing, that is very important, at this time the market is bearish, but there is not much to go back to a rising price.
I am very new in this Bitcoin theme, but what information you give is very clear and easy to understand.
Thank you so much for this information. @jrcornel
I've met Tom a few times in person & CFA annual meetings. He's always bases his views on data & not emotions which I believe is key to successful investing. Cryptos will only get bigger going into trillions of USD valuations easily in next few years. This will become much bigger Internet b/c it's the entire economic system we are talking about here. Day by day Crypto gets more entrenched readying for early stage mass adoption. Dapps will be explosive in 2019 much like ICOs were in 2017.
He has been one of the most accurate stock pickers and macro forecasters throughout his career. I couldn't have been happier when he made his way into crypto. He has struggled so far with his predictions not really hitting for the most part, but at least he bases them off of data and analytics instead of gut feelings. Where did you meet him?
I met him at CFA meetings when he was speaking. I remember him talking about oil crashing at that time. It was early 2016. He showed a lot data suggesting oil prices & companies should recover longterm. I believe then it was trading around $25 to $30 a barrel! He did not talk about Bitcoin or Crypto at that time but I was. People looked at me so funny then. I just have no doubts Crypto is going to be life changing in a few more years. The growth in every metric besides prices in 2018 has been impressive.
Perhaps you helped steer him in that direction. He first picked up crypto in late 2016 I believe.
Maybe.
I get what Tom Lee is saying however he has lead a lot of investors in to hdling when they could have cashed out at much higher prices. Sometimes I wonder if he's one of the good guys or bad guys lol Not sure what to think of him any more.
He definitely is saying what he truly believes based on data, science, and analytics. Whether he is giving you personal financial advice as to when to buy, sell, or hold, well that is another story altogether. :)
Though, his forecasts haven't been that great in crypto thus far. He has been one of the best stock pickers in the business throughout his career though.
Is this an unemotional analysis of the facts? Or a child having a temper tantrum over things that didn't go their way? It seems very arrogant that he would claim he's not wrong, that the market is wrong, after making such lofty predictions with zero apology.
He is basically saying that the selling isn't being driven by normal market forces. Saying that the SEC scaring a lot of ICO projects into dumping their btc/ether to pay back investors is a big part of this. Also possibly tax related selling along with market manipulation are all contributing to lower prices than make sense based on past/historical btc pricing models.
I'm inclined to believe that. I figured since Bitcoin hit resistance at 20K and had support at 6k multiple times that it's true value was closer to 26k / 2
Eventually these ICO projects will run out of btc and ether to sell, and in a few weeks we turn the page on another year. I think things will start to turn around come January personally.
Finding dependencies in the numbers is precious.
He seems to have made connection on BTC price with the numbers of wallets, wallets activity and supply.
The thing is just how depended the BTC price is on this things. Usualy they are never 100% accurate. It is always a range.
The simple five year time chart of BTC, shows R value of time on BTC of around 50%. Meaning that BTC at the moment has 50-50 chance :).
If there is data and time, will be interesting to check the R value of these factors on BTC with a multilinear regression.
Yep, if he is even remotely close that will be good enough for me. We just need bitcoin to catch on as digital gold or as a semi-popular payment option, or both. :)
Too many equity gurus get it wrong when predicting cryptocurrency futures/prices.
I think eventually Tom will be proven right. His reasoning is based on sound data, he just may be off on the timing. As we know, the market can stay irrational longer than most can stay solvent.
What does he say about Steem?
He mentioned it a few times when it was in the top 30. Now that it is outside the top 50 he mostly ignores it. He doesn't pay attention to coins outside the top 50...
I usually don't either. :-(
Can't believe how far this project has fallen. At one point steem was the second most valuable crypto in the world.
I agree. It's incredibly frustrating. I can only imagine how difficult it must be for somebody that has 115,000 SP.
I still think there are a ton of great projects happening in our world here. I also still think that Steem has the greatest potential of any coin out there. That's what is so disappointing about it all so far.
The userbase should feel good about holding.... instead we all feel as if we've missed our opportunity. What a terrible feeling that is.
I just fail to see the future at this point. Steemit.com was the big potential here and that has been utterly and completely ignored. They have no money they are willing to spend on things. Whatever anyone else builds, steemit.inc has roughly 80 million steem they can dump on any upmoves. I am failing to see why I am still holding what I hold at this point...
I think the potential exists for one of the other major DApps (Busy or eSteem) to ‘take the crown’ from Steemit as the main social media interface to the blockchain. That way Steemit Inc can get on with running and improving the chain, and someone else can take point on the UI/UX stuff. Of course, there’s always the chance that @ned has received a bit of a ‘wake-up call’ over recent events and is working to put things back on track. Osit.
Yes that is the hope, but we really someone to come in with money. We are lacking that currently. Everyone shows up to steem to take money from it, not put money into it. EOS raised $5 billion with which to build things. Steem has no such warchest, pretty tough to compete without a big warchest...
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While I think Tom Lee is great and has great fundamentals to why bitcoin has value, he needs to recognize that the bitcoin community is still trying to decide what they want to be to drive value... Store of value vs payment processing; this will impact when valuations are realized on the future.
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Very true. I think it is digital gold first and foremost. Then I think over time, with upgrades/updates, it will eventually be a payment system as well. Best of both worlds. :)
He is comparing apples to oranges imo, bitcoin is NOT a payment network, (and never will be one imo)it's use is limited to speculation.
Imo the majority of the few "payments" that happen on the bitcoin network are mainly from folks that are cashing out some of their profits by directly buying some stuff. Not to mention that there are and there will be more cryptos out there that can be used as payments networks too, banks included or not.
We should not forget that Irrational exuberance affects not only bull markets but bear markets too, and here we are....
Good points. I agree with you that bitcoin is not a payment network right now. Though I think it could be. It remains to be seen if the necessary upgrades/updates will ever come to make it a feasible payment network though. Either way, if it captures just 10% of the $8 trillion dollar gold market, it is still undervalued by a factor of 10X ;)