Tom Lee: Bitcoin is Severely Undervalued and Fair Market Value is $14,800

To some people, it appears the cryptocurrency markets have run out of steam as the price continues to dwindle, finding new lows. However, despite these dark times, there are still sparks of hope left among notable members in the space.

Bitcoin bull, Thomas Lee, the head of research at Fundstrat Global Advisors previously predicted the price of Bitcoin to rally to $25,000 by the year’s end. While it appears his prediction will not come true as Bitcoin is trading at $3,300, Lee remains optimistic.

Bitcoin is Severely Undervalued

According to Lee, bitcoin’s price is severely undervalued at $3,300 and its fair value is closer to between $13,800 to $14,800.

As reported by Bloomberg, Lee said:

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.

Lee is pointing out that despite the massive decrease in Bitcoin’s price, the sheer number of cryptocurrency users does not reflect the price accurately.

He then explained that consumer adoption and Bitcoin’s acceptance as an asset class will be a leading factor in driving the price higher in 2019 and beyond.

According to Lee’s price metric based on the number of crypto wallets, he said:

If bitcoin wallets approach just 7 percent of Visa’s 4.5 billion account holders, fair value would be $150,000 per bitcoin.

When asked for another price prediction to update his end-of-year forecast, Lee declined to giving a prediction saying that:

We are tired of people asking us about target prices.

While Lee refuses to give target prices, he is confident in his valuations for Bitcoin’s fair value and believes that as long as people accept Bitcoin as an asset class and user growth continues to increase, we will see a Bitcoin bull run.

Bitcoin is Slowly Being Accepted as an Asset Class

Tom Lee thinks Bitcoin being accepted as an asset class is highly important to spark the next bull run, and there are already plenty of positive developments.

The Intercontinental Exchange (ICE), which is the parent company of the New York Stock Exchange, is launching Bakkt in January 2019. Bakkt is a digital asset exchange that will offer institutional investors physically settled bitcoin futures.

It’s evident that Bakkt is serious about accepting Bitcoin as a viable asset class.

Another notable exchange that considers Bitcoin as an asset class is Nasdaq, who will launch a Bitcoin futures product by the end of Q1 2019.

Institutional investment is coming, and 2019 is shaping up to be the year it comes.

What do you think the fair value of Bitcoin is? Will all these institutions coming into the space be positive for Bitcoin and crypto? Let us know what you think in the comment section below.

1 Comment

  • Malcolm Driskel
    Posted December 17, 2018 3:19 am 0Likes


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