Wall Street’s best-known cryptocurrency bull and the founder of Fundstrat Global Advisors, Tom Lee, recently explained why his Bitcoin price prediction for 2018 is yet to come to pass.
“Fair value of Bitcoin (BTC) is significantly higher than the current price,” Lee said in a note to clients, Bloomberg reported on December 13.
His latest statement comes at an interesting time as BTC has had one of its worst days yet since its inception in 2009.
The Bitcoin proponent said the market is wrong about Bitcoin as its fair value is well above its current market price. According to him, the value of the flagship cryptocurrency should be between $13,800 and $14,800 given the growing number of active wallets and the limited supply of Bitcoin. The note reads:
“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.”
The head of Fundstrat is now betting on institutional adoption. He said that the value of BTC will surge in the next few months due to the increased entry of institutional investors into the market. His sentiment regarding institutional interest in crypto markets echoes what the founder of Galaxy Digital Mike Novogratz said during an interview with CNBC a few days weeks ago.
“It’s also a bull market in institutions building the infrastructure needed for real-money investors to start investing in this space,” Novogratz told CNBC. “Three to six months from now, there will be an ‘all-clear’ sign for people — big institutions and pension [funds] — to start investing.”
Lee declines to give his year-end forecast
When asked to give his year-end prediction, Lee declined by stating “we are tired of people asking us about target prices.”
Early this year, Lee predicted that BTC would trade at $25000 by December of 2018. In March, he claimed the largest cryptocurrency by market cap would hit an eye-watering $91000 by 2020. In November, however, he slashed his year-end price prediction by almost 50%. Lee lowered his price prediction to $15,000.