Fundstrat’s Tom Lee thinks Bitcoin (BTC) will accrue rate benefit next a similar logic to the Silicon Valley tech titans.
During an interview for CNBC’s Road Signs Asia on show on Nov. 15, Lee argued that cryptocurrencies “are network value assets” — and share this with the world’s most successful tech shares.
“Network worth assets”
Lee — a renowned Bitcoin bull, co-founder and Wall Street strategist at Fundstrat Worldwide Advisors — designed his argument when questioned about the logic guiding Fundstrat’s $25,000 by 2022 forecast for Bitcoin.
Noting that the number was established in 2017 as element of a five-year forecast for the asset, he said he still think it is “quite uncomplicated to achieve”:
“Cryptocurrencies are community worth property, that means the much more persons maintain the asset, the better the worth. In simple fact, it’s a log operate — so if you double the people maintain it, you get a quadrupling of value. To go to $25,000 you effectively will need a minor a lot less than 4x increase, which indicates you will need to double the variety of persons who keep Bitcoin.”
Lee explained that Fundstrat estimates that about 50 % a million persons individual and use Bitcoin so that you would will need to hit a million customers to get a $25,000 valuation.
Noting that this is primarily a utility functionality, Lee drew an analogy with the functionality of FAANG (Facebook, Amazon, Apple, Netflix and Google) stocks considering the fact that their public listing. He claimed:
“70% of their return [since public listing] is described by the advancement of the world-wide world-wide-web in that period of time. In other terms, it is a LOG purpose of the internet’s development, and that’s how cryptocurrencies are likely to do the job.”
In conditions of other components, Lee reported he was quite bullish on Bitcoin in the very long time period, stating he thinks it is now “still the earliest times for electronic assets” and that about time they’ll come to be hugely institutional and an set up asset course.
“Once we strike that it’s an additional hockey adhere,” he claimed, somewhat disconcerting his interviewer with the metaphor.
In October, Lee argued that obtaining produced a major transfer at the get started of 2019, Bitcoin now needs to consolidate its gains.
That very same thirty day period, the strategist proposed that Bitcoin is positively correlated with the S&P 500 sector index and is as a result not a hedge from macro turmoil, as some argue.