By
Bhushan Akolkar
April 19th, 2024
According to cryptocurrency bull Tom Lee, Bitcoin is underestimated, and its fair price should be about $10,000 above where it is trading now.
The digital market is very volatile, but some outstanding crypto bulls are hazarding guesses about the price of Bitcoin. One of them is Tom Lee, co-founder of Fundstrat Global Advisor, who at the beginning of 2018 predicted Bitcoin would hit a $25,000 benchmark this year. Later, he updated his Bitcoin price forecast for this year, predicting that it would reach $22,000 instead of $25,000.
Unfortunately, Lee’s lofty price predictions have fallen short, and given the current market situation, it is impossible to reach Lee’s year-end target. However, the crypto bull is still optimistic about cryptos and Bitcoin in particular. Declining to make any future predictions on the cryptocurrency’s price, he believes that Bitcoin’s dismal price of roughly $3,300 is wrong, and the coin is currently extremely undervalued, by as much as $10,000.
While speaking to Bloomberg, Tom Lee said:
“Fair value is significantly higher than the current price of Bitcoin. 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.”
Lee explained that his fair value figure is based on the number of active wallet addresses, the number of transactions across each account, and the overall supply. He also pointed to Bitcoin’s price being fairly valued at $150,000 per coin if the number of wallet addresses can reach 315 million, which would be 7% that of VISA’s 4.5 billion accounts.
According to Lee, Bitcoin is undervalued partly because of fears surrounding a potential global economic collapse and the corresponding de-risking by investors, initial coin offering treasuries selling off assets to fund operations, and the normal market cycling following the break of a parabolic advance.
Further, he said that he is getting weary of everyone’s obsession with daily price fluctuations:
“We are tired of people asking us about target prices.”
Bitcoin will Make a Comeback
Currently, Bitcoin is down more than 80% from its all-time high. However, that does not frighten major investors. For example, crypto billionaire Tim Draper believes the value of bitcoin will keep going higher in the upcoming years, and digital currencies will eventually overtake fiat currency, making up two-thirds of the world’s currency value.
Another billionaire investor and venture capitalist Jim Breyer is sure that the prospects of the technology are too great for it to be permanently buried by short-term market movements. Noting that the current market situation is not rare and periods of drop occur in cycles, he said that the current cycle would finally come to an end.
A former partner at Goldman Sachs Mike Novogratz also remains confident that Bitcoin will make a comeback. Moreover, addressing the fears surrounding Bitcoin he compared the price rise to a drug, wherein “an instance of testosterone boiling over and its [Bitcoin’s] fall led to pessimism and rampant fear.”