Tom Lee, the co-founder of market strategy firm Fundstrat Global and serial CNBC contributor, believes that the fair value of Bitcoin (BTC) is between $13,800 and $14,800, or roughly 4.2x higher than its current value.
As detailed in a recent report by Bloomberg, Lee published a letter to investors on Thursday stating that the number of active wallet addresses, usage per account and factors influencing supply all add up to a fair value for Bitcoin near $15,000.
“Fair value is significantly higher than the current price of Bitcoin,” Lee wrote. “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.”
In a previous letter, Lee provided guidance on additional factors feeding into his estimation for Bitcoin’s fair value, including the current energy and device costs associated with mining a single coin. Lee notes that the current break-even price is roughly $7,000, which is down from the previous $8,000 due to the introduction of Bitmain’s S9 miners.
Lee believes that the current depression in price is a result of last year’s meteoric rally, a “meltdown” in the macroeconomic climate and treasury sales following initial coin offerings. However, Lee’s Bitcoin predictions have been a moving target for the greater part of the year, which has led to criticism as of late.
Lee’s $15,000 price target for the end of the year looks like it won’t be reached and he has explicitly stated he will not be updating his predictions.
Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.