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The Road to USD 25K is 'Easy': Double Bitcoin Users, says Tom Lee 101
Source: Twitter

To hit USD 25,000 per bitcoin (BTC), we need to find a way to double the current number of active BTC users, according to co-founder and the Head of Research at Fundstrat Global Advisors, Tom Lee.

In an interview with CNBC today, Lee argued that BTC will hit USD 25,000 by 2022, which is the number Fundstrat established two years ago as a five-year view for the coin. “It’s quite easy to achieve,” says the analyst. According to the company’s estimates, today less than half a million people “own and use bitcoin widely today,” and if that number turns into a million, the price will get to USD 25,000.

“Cryptocurrencies are network value assets, meaning, the more people that hold it, the greater the value. In fact, it’s a log function, right? So if you double the users, you get a quadrupling of value. And to go to USD 25,000, you essentially need a 4x rise – a little bit less than that – which means you need to double the number of people who hold bitcoin,” Lee explained.

Meanwhile, European digital asset management company, CoinShares Group, in their recent report estimated that, a year ago, at least 139 million user accounts have been created at crypto service providers, representing an estimated minimum of 35 million ID-verified users.

The Road to USD 25K is 'Easy': Double Bitcoin Users, says Tom Lee 102
Source: CoinShares

In either case, Lee said that the long-term future of Bitcoin is “very bullish.” It’s the early days for digital assets, he explains, and over time it will become institutional and an asset class. “Once we hit that,” says Lee, “it’s actually another hockey stick [-like price rise].”

He explained that what we’re seeing here is a log / utility function, and as an example for comparison he took the price return of the FAANG (Facebook, Amazon, Apple, Netflix, and Google) stocks since their IPOs (initial public offerings). “70% of the return is explained by the growth of the global internet in that period of time,” he says, concluding that “it was a log function of the internet’s growth, and that’s how cryptocurrencies are going to work.”

Meanwhile, anonymous investor and Twitter user Plan₿, known for his insights into the stock-to-flow ratio, said recently that that the exponential growth in bitcoin’s price will continue, and that it will be fueled by BTC’s scarcity dynamics. “Before Christmas 2021, Bitcoin should be, or should have been, above USD 100 K; if not, then all bets are off and it [the stock-to-flow model] probably breaks down.”

Furthermore, Lee said back in June that BTC is just at the beginning of its bull run, that it will easily surpass its all-time-high, and that it can reach as high as USD 40,000 in an unspecified future. In another interview, he also stated that if equities rise, bitcoin will follow – and all-time-highs may be coming soon.

In a separate interview with Block TV, published today, Lee said that “There is a lot of tailwind building in 2020…Incrementally the ball is moving forward and that’s bullish.”

Sead Fadilpašić , 2019-11-15 11:50:00 ,

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NewsBlock © 2019 - 2020 All rights reserved.

NewsBlock © 2019 - 2020. All rights reserved.

While Bitcoin’s price seemingly moves without rhyme or reason — collapsing by dozens of percent and embarking on face-melting rallies on a whim — the cryptocurrency market is filled to the brim with fractals.

Related Reading: Analyst: Bitcoin Price Likely to Fall to Low-$8,000s as Chart Remains Weak

A brief aside: A fractal, in the context of technical analysis and financial markets anyway, is when an asset’s price action is seen during a different time. This form of analysis isn’t that popular, but it has proven to be somewhat valuable in analyzing Bitcoin.

One recent fractal popularized by a well-known cryptocurrency trader is implying that BTC is going to return to the low-$7,000s in the coming days.

Bitcoin Fractal Implies Retracement to Low-$7,000s

A well-known crypto trader going by “Tyler Durden” on Twitter recently posted the chart below, which shows that a Bitcoin price fractal may be playing out. The fractal has four phases: horizontal consolidation marked by one fakeout, a surge above the consolidation phase, a distribution, then a strong drop to fresh lows.

If the fractal plays out in full, BTC could reach the low-$7,000s again, potentially as low as $7,100. This would represent a 20-odd percent collapse from the current price point of $8,800.

It isn’t only a fractal that is hinting Bitcoin has the potential to visit its lows. As we reported on Saturday, Bloomberg believes that if the GTI Vera Convergence Divergence Indicator flips red, a downtrend could push the cryptocurrency back to $7,300.

Related Reading: Stephen Colbert Pokes Fun at Bitcoin in Monologue: Mainstream Gone Wrong?

Can Bulls Step In?

But again, many believe it is irrational to have such bearish interpretations of the cryptocurrency’s chart at the moment. As reported by NewsBTC earlier, Popular crypto trader Mayne recently noted that the “people waiting for $6,000” are irrational. He quipped that Bitcoin retracing and consolidating after its fourth-biggest bull move in history ($7,300 to $10,500, a 42% gain) is perfectly par for the course, but noted that it’s totally possible we can go lower from $8,800.

The medium-term technicals support this.

Trader and CoinTelegraph contributor FilbFilb found that by the end of November or start of December, the 50-week and 100-week moving averages will see a “golden cross,” which he claims is far more significant” for the Bitcoin market that other technical crosses.

Also, a Bitcoin price model created using Facebook Prophet machine learning found that the leading cryptocurrency is likely to end the year at just over $12,000. What’s notable about this model is that it called the price drop to $8,000 months in advance, and forecasted a ~$7,500 price bottom for BTC.

To put a cherry on the cryptocurrency cake, Crypto Thies observed that when Bitcoin bottomed at $7,300, it bounced decisively off the 0.618 Fibonacci Retracement of the move from $3,000 to $14,000, which correlates with the two-week volume-weighted moving average. He added that summer 2019’s consolidation was marked by Bitcoin flipping major resistances into support levels, implying that a bullish reversal and subsequent continuation is likely possible in the coming weeks.

Featured Image from Shutterstock

Nick Chong , 2019-11-10 12:00:38

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