Tom Lee Explains the Logic Behind Bitcoin Price Forecasts

Tom Lee, a prominent figure at Fundstrat, recently delved into the reasoning behind his Bitcoin price forecasts during a discussion on the “Odds Lots” podcast.

Lee highlighted the unique nature of Bitcoin as an asset class, emphasizing its cooperative value. He pointed out that individuals who contribute to the Bitcoin network reap the benefits, setting it apart from traditional assets.

Reflecting on Fundstrat’s initial coverage of Bitcoin in 2017 when it was valued at around $1,000, Lee referenced a white paper published by the firm. The paper outlined two key variables influencing Bitcoin’s price: the number of active wallets and the level of activity per wallet.

In a forward-looking projection, Lee mentioned that Fundstrat anticipated Bitcoin reaching $25,000 by 2022 if the number of wallets increased by 70% and activity per wallet rose by 40%.

Lee commended Bitcoin as an “incredible technology” due to its unparalleled security record, having remained unhacked throughout its 14-year existence. He emphasized the absence of fraudulent entries in the Bitcoin ledger, underscoring the integrity of the cryptocurrency.

Despite Bitcoin’s resilience and technological prowess, Lee pointed out that over 80% of Bitcoin price movements are still attributable to activity per wallet.

In a related development, Fidelity’s Jurian Timmer suggested that Bitcoin’s underwhelming network growth could be a contributing factor to its failure to achieve record highs in recent months.

The cryptocurrency market experienced a dip on Monday, with Bitcoin slipping below the $60,000 mark for the first time in over a month, touching an intraday low of $59,863, according to data from CoinGecko.

Tom Lee reaffirmed his earlier prediction of Bitcoin hitting $150,000, doubling down on his forecast from June.

In conclusion, Lee’s insights shed light on the intricate dynamics influencing Bitcoin’s price movements, underlining the significance of network activity and wallet engagement in shaping the cryptocurrency’s value trajectory.