Market is wrong; fair value of Bitcoin much higher: Tom Lee
Tom Lee, the cryptocurrency optimist and head of research at Fundstrat Global Advisors, has chided the current market conditions and stated that the “fair value of Bitcoin [BTC] is significantly higher than the current price,” in an interview with Bloomberg on 13 December.
Bitcoin has plummeted to a significant low, which the coin has not seen since before the December 2017 bull-run, which saw the price skyrocket to almost $20,000. Many market analysts have touted that the coin will bottom at $2,500, with crypto-critics stating that the entire cryptocurrency value could go down to 0.
Lee suggests, in a note delivered on Thursday, the fair value of the top crypto, in terms of the number of active wallets addresses, usage per account and other factors affecting the supply accounts for a price of $13,800 and $14,800. Currently, Bitcoin is languishing at $3,300, with a further drop likely, given market sentiments.
“Fair value is significantly higher than the current price of Bitcoin,” stated the Fundstrat executive. He added, “In fact, working backwards, to solve for the current price of Bitcoin, this implies crypto wallets should fall to 17 million from 50 million currently.”
When the price of Bitcoin surged late last year, Lee stated that the meteoric increase was due to the macroeconomic “meltdown” and treasury sales during the tokenization process. Initial Coin Offerings (ICOs) which was very popular at the close of 2017 and early 2018, has since declined, due to over-funding, poor tokens and an increase in fraudulent cases.
Increased crypto-adoption is a growing need for the market to become a universal, ubiquitous currency, with Lee affirming the adoption of Bitcoin and its acceptance as an asset class is what will drive its growth in the following year. He added that if Bitcoin wallet holders increase to about 7 percent of Visa’s 4.5 billion account holders, the fair value of the coin would jump up to $150,000.
Earlier in May, the crypto-bull pegged Bitcoin to see a year-end rally and reach as high as $25,000, beating the December 2017 bull-run. Tom Lee adjusted his expectations in November, when the coin was trading above $6,000 and predicted a year end rise to $15,000.
After the Bitcoin Cash [BCH] hardfork, which sent the market into a freefall, the top crypto’s price has decreased by nearly 48.4 percent and has seen a nearly $50 billion market cap fall, since the beginning of November.
Image via Shutterstock
Follow us on Twitter