Fundstrat’s Thomas Lee has said that cryptoassets will become institutional long-term and follow the network effects that have been established by tech stocks such as Facebook, Amazon and Apple.
Lee, a managing partner and head of research at Fundstrat, argued in an interview with CNBC’s Street Signs Asia program that cryptocurrencies are “network value assets” and share similarities with popular FAANG stocks (Facebook, Amazon, Apple, Netflix, Google).
When asked about his outlook for bitcoin, Lee said,
Long-term very bullish. I think this is still the earliest days for digital assets. A lot of this overtime is going to be very institutional and become an asset class. I think once we hit that it’s actually another hockey stick.
Lee was asked about his $25,000 prediction for bitcoin by 2022, which he says is still “quite easy to achieve,”
Cryptocurrencies are network value assets, meaning the more people hold the asset, the greater the value. In fact, it’s a log function — so if you double the users hold it, you get a quadrupling of value. To go to $25,000 you essentially need a little less than 4x rise, which means you need to double the number of people who hold Bitcoin.
According to Lee, Fundstrat has estimated that roughly half a million people own and use bitcoin and that a $25,000 price target would require the number of users to double to one million. Lee sees the price of crytpo-assets continuing to grow based upon a network effect, similar to the FAANG tech stocks,
70% of their return [since public listing] is explained by the growth of the global internet in that period of time. In other words, it’s a LOG function of the internet’s growth, and that’s how cryptocurrencies are going to work.
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