May 15, 2021

The growth dynamics of the crypto market is similar to technological giants

The growth dynamics of the crypto market is similar to technological giants

Bitcoin will accumulate value similar to the high-tech giants from Silicon Valley, considers the founder and main strategicFundstrat analyst Tom Lee. In a CNBC interview, the famous Bitcoin bull once again announced the achievement of the main cryptocurrency price of 25 thousand dollars, this time by 2022.

Network value or five-year Bitcoin

From the interview it becomes known that in factin fact, I had in mind the “Bitcoin bull” from Wall Street, all of 2018 talking about the price of 25 thousand dollars for 1 BTC. It turns out that this is a forecast within the framework of a five-year cycle begun in 2017, and the achievement of the goal will occur no earlier than 2022. All other interpretations and optimistic forecasts of Tom Lee should be forgotten?

Today, talking about the five-year plan of bitcoin, the analyst was optimistic and stated that this goal is “... quite easy to achieve,” while he introduced another original concept: the network cost of bitcoin.

The growth dynamics of the crypto market is similar to technological giants

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“Cryptocurrencies are network assetsvalue, which increases with the increase in people owning the asset. This is a logarithmic function, which when doubling the number of users should give a price increase of 4 times. Thus, in order to reach 25 thousand dollars, it is necessary to increase profitability even by less than 4 times, and therefore, increase the number of investors owning bitcoin only twice ”.

According to Fundstrat analysis, about half a million people currently own bitcoin, therefore, it is necessary to increase this number to a million and the price of cryptocurrency will reach $ 25,000.

Tom Lee reinforced his prediction by comparing it with the growth of FAANG shares (Facebook, Amazon, Apple, Netflix and Google) since their listing.

“70% of their profits [from the moment of IPO] are explained by the growth of the global Internet in this period. In other words, this is a logarithmic function of the growth of the Internet, and that is how cryptocurrencies will work. ”

The growth dynamics of the crypto market is similar to technological giants

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Next came the familiar spells about institutional investors, mass adoption and an established asset class:

“As soon as we hit, it becomes another hockey stick”- the analyst made a figurative comparison.

Recall some particularly “prophetic” predictions from the Bitcoin bull:

  • In July 2019, Tom Lee announced that Trump’s position “will send bitcoin to the moon” by 20-40 thousand dollars by the fourth quarter.
  • In June 2019, he pointed to the same range, explaining this by the worldwide adoption of bitcoin and the positive impact of the Facebook Libra project.
  • Last year, the Wall Street Bull’s prediction range ranged from 91 thousand by March 2020, to 25 thousand by the end of 2018.
  • And in November, he settled on the adjusted forecast of the price of 15 thousand dollars by January 2019 (in fact, the price was then about 3.5 thousand dollars).

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