Bitcoin [BTC]’s prices are significantly lower than its $13000-$14000 fair price, says Tom Lee


Fundstrat’s Thomas Lee aka Tom Lee, well-known for his predictions on Bitcoin in the crypto-community spoke about the current market for cryptocurrencies and more specifically about Bitcoin and year-end predictions.

As reported by CNBC, Thomas Lee, former J.P. Morgan Chief of Equity Strategist said:

“Given we are so close to year-end, we are not providing any updates to near-term price objectives—read this as, we are tired of people asking us about target prices.”

Lee, in his recent appearance in the crypto-community, said that he was done with giving out year-end predictions but instead updated his opinion on what the fair price for Bitcoin should be.

As per the International Accounting Standards Board, fair value is the price received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on a certain date, typically for use on financial statements over time.

To further simplify it, fair value is the rational and unbiased estimate of the potential market price of a good service or asset.

Lee calculated the fair price of Bitcoin with the number of active wallet users in mind and said that it is “significantly” higher than the actual price. Considering the number of active wallet users are 50 million, Lee thinks that the active wallet users have to be reduced to $17 million to justify the current price of Bitcoin.

Moreover, Lee thinks the fair price of Bitcoin should lie between $13,800 and $14,800, but the current price is hovering in the $3,300 range.

It might be true to some extent as the price of Bitcoin has collapsed vastly in the last two months breaking major supports at ~$6,500 and now at ~$3600. The prices are getting closer to $3,000 mark as the end of the year approaches.

If the Bitcoin wallet users approach 7% of the total number of users of Visa, which is at a massive $4.5 billion, then according to Lee’s regression model, the fair price of a Bitcoin would be $150,000.

Bitcoin has suffered a massive decline of 82% in its price and market cap since its all-time high in December 2017 and the total market cap of all-cryptocurrencies have also declined by an approximate of 87% and is currently hovering at $111 billion.

Lee said that investors will likely stay bearish until Bitcoin remains below the 200-day moving average and that technicals play an important role in cryptocurrency trading.

In his recent appearance on CNBC, Lee cut his year-end prediction for 2018 from $25,000 to $15,000 and substantiated it with the research done by the Fundstrat’s data science team which included calculating a break-even point. Lee later changed his prediction to $15,000.

A Twitter user J. Braunstein commented:

“A prudent speculator never argues with the tape. Markets are never wrong, opinions often are.” – Jesse Livermore

Another user BitHoncho replied:

“Oh well .. he was wrong about $ES targets as well .. But always called on cnbc .. It should be @winternomics who should be there”

Jersey replied BitHoncho saying:

“Value is scarce man, even if Kaz was up there, most wont take in the info and judge the mask or his grammar, look at the 99% nitpicking Musk’s tweets 😂 #RuleOfTheAtom”

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