Bitcoin Price May Explode to $500,000, Says Fundstrat’s Tom Lee
Feb 19, 2020 at 11:59 am UTC by Wanguba Muriuki · 3 min read
Fundstrat’s Tom Lee said that the price of Bitcoin could surge to $500,000 in the long term, but he failed to mention the exact timeline for such a pie-in-the-sky target to be achieved.
Bitcoin and its value have been a topic of discussion for many in recent years. Tom Lee, the head of research at the Fundstrat Global Advisors, said that the Bitcoin price could surge to half a million dollars in the long term. Nonetheless, he did not mention the exact timeline for such a pie-in-the-sky target.
$500,000 Is Not a Pipe Dream
During a new interview with Nasdaq, Tom Lee says that he still supports his opinion that the Bitcoin price will hit $40,000 before the Dow Jones hits 40,000. When asked if Bitcoin will rise to $500,000, he said that he believes a 4,900% increase is highly likely based on the number of users that will join the network eventually. He added:
“I think in the long term it’s possible because today Bitcoin’s transaction activity is twice that of PayPal, 7x the Discover network. It’s the second-largest transaction network after Visa, and there are four billion Visa cardholders. So if you get to five million Bitcoin users, it’s almost 100 x increases in price.”
Although he is not sure of the timeline that Bitcoin needs to surge to these levels, he believes that the token has a strong use case in the current financial system. He commented:
“It’s not like I’m necessarily critical of how financial systems work, but too much money is paid to intermediaries. Today, roughly 6% of all GDP globally is paid to the financial system to manage trust. Bitcoin has been around for 11 years, has never had a single fraudulent activity on its blockchain with $5 trillion of activity.”
Since Bitcoin works better than the traditional financial systems and the cost is significantly lower, more people will join the space in the long run. Currently, it is possible to transmit a million dollars of Bitcoin between countries for just $15. That same transaction using remittance counterparties would cost between 5% and 10% of that $50,000 to $100,000.
Could There Be Pitfalls for Bitcoin Price?
Bitcoin works better compared to the traditional systems since it is cheaper and more secure, as explained by Lee. To put everything into perspective, it takes one to pay $3.90 in fees to transfer almost $1 billion worth of BTC.
In spite of being a raging bull, Lee also thinks that Bitcoin may ultimately get destroyed. He outlined various doom-laden scenarios like governments banning crypto off-ramps or a potential 51% attack on the network.
Although the network has performed well for over ten years, Lee stated that there is potential for undiscovered security loopholes and harsh government regulations, which may harm the future of the crypto.
“The future is uncertain, and Bitcoin would be destroyed if there was some proof-of-work attack on its blockchain. So if somehow the blockchain became unsecured, it would lose all of its value. Governments could try to ban the off ramping of Bitcoin. So to convert it back into fiat, they could tax it or make it illegal. That would make it very difficult. So there’s a lot of ways to kill Bitcoin.”
According to the analyst, the crypto market may succeed as a generational thing. For instance, Schwab’s latest holding for stocks, a top-five holding, is the Grayscale Bitcoin Trust. Hence, just like the young people adopted the internet, the young are continually adopting cryptocurrencies.
Wanguba Muriuki is a content crafter passionate about putting everything into writing. He is passionate about Blockchain and Traveling. He is also an experienced creative and technical writer. Everything and everyone has a story to tell. What better way to capture the real story than in words.
From the beginning of its inception, Bitcoin was worth cents but had indestructible inner value. In the darkest days of humanity, only rare things will have value. Bitcoin and other cryptocurrencies can become the vaccine from the financial crisis.