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Tom Lee Reveals Reasons Behind Bitcoin Price Predictions
Alex Dovbnja
The key factor driving Bitcoin adoption was named by Fundstrat’s Tom Lee
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During his recent appearance on the “Odds Lots” podcast, Fundstrat’s Tom Lee explained the logic behind his Bitcoin predictions.
“Bitcoin is different from other asset classes because it has cooperative value. You know, people who contribute to the network benefit from it, and that’s different from any other asset class,” Lee explained.
Lee recalled that his company first wrote about Bitcoin in 2017, and at the time, Bitcoin was worth about $1,000. Back then, Fundstrat published a white paper explaining that there are two main variables that determine the price of Bitcoin: the number of active wallets and activity per wallet.
“At the time, we made a simple projection. We said that in five years, by 2022, if the number of wallets increased by 70% and activity per wallet increased by 40%, Bitcoin would reach $25,000 by 2022.” Lee said.
Permabull called Bitcoin an “incredible technology” as it is so secure that it has never been hacked in 14 years of its existence. “Not a single entry in the Bitcoin ledger is fraudulent,” he added.
That said, over 80% of Bitcoin’s price movements are still explained by activity per wallet.
AS reported by U.TodayFidelity’s Jurian Timmer suggested that the disappointing growth of the Bitcoin network could be the reason why the cryptocurrency has failed to post record highs in recent months.
On Monday, the cryptocurrency king slipped below the $60,000 level for the first time in more than a month, hitting an intraday low of $59,863, according to CoinGecko data.
Recently, Lee doubled on its previously stated price target of $150,000 in June.
About the author
Alex Dovbnja
Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience covering everything related to the burgeoning industry, from price analysis to Blockchain disruption. Alex has authored more than 1,000 stories for U.Today, CryptoComes, and other fintech media. He is particularly interested in regulatory trends around the world that are shaping the future of digital assets; he can be contacted at alex.dovbnya@u.today.