Crypto NewsAnalysisTom Lee, Who Correctly Predicted the Previous Bull in Bitcoin (BTC), Talks...

Tom Lee, Who Correctly Predicted the Previous Bull in Bitcoin (BTC), Talks About BTC

Tom Lee, one of the most well-known analysts in the market, made a statement after the Bitcoin (BTC) decline.

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Fundstrat's famous market strategist Tom Lee shared his views on Bitcoin (BTC), stocks and technology in a recent interview.

Lee, known for his bullish comments on Bitcoin and his accurate prediction of the last bull market, explained how he formulated price targets for Bitcoin.

Lee emphasized that Bitcoin is different from other asset classes because of its cooperative value. Contributors to the network benefit from BTC, which distinguishes it from other assets. In 2017, when Bitcoin was around a thousand dollars, Fundstrat published a white paper highlighting that just two variables explained more than 80% of Bitcoin's price movement: the number of active wallets and activity per wallet.

Fundstrat made a simple prediction based on these variables. They predicted that Bitcoin would reach $25,000 if the number of wallets increased by 70% and activity per wallet increased by 40% in five years (by 2022). Lee said that even if they do not fully understand Bitcoin, its price movements can be predicted mathematically.

Lee praised Bitcoin's technology and described BTC as a secure, decentralized database. There has not been a single fraudulent entry on the Bitcoin ledger in its 14 years of existence. In contrast, 6% of all bank book activity during the same period was considered suspicious by the FDIC.

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Lee believes that Bitcoin's future price will depend on greater adoption and growth of network activity. He is confident that both will happen and lead to high exponential price increases. He noted that if the number of wallets continues to grow at a linear rate over a long enough period of time (say, five years), Bitcoin could reach millions.

Lee likened the adoption of Bitcoin to the adoption of the dollar. In the beginning, not everyone accepted the dollar, but as more people accepted it, they began to use it more. He suggested that the history of currencies could explain Bitcoin's potential growth. As Bitcoin becomes more widespread, innovations such as BTC pricing, BTC lending, BTC micropayments, or blockchain payments may emerge.

Lee couldn't identify a single use case that would explain the growth in wallets, but noted that enterprise adoption is increasing. Citing BlackRock's entry into Bitcoin as a significant development, Lee argued that it invalidates the idea that Bitcoin is just a hobby for ordinary people. According to Lee, this move by BlackRock gives credibility to Bitcoin as a legitimate form of digital money.

*This is not investment advice.

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