Bitcoin News: While the bitcoin (BTC) prices are plunging down, Tom Lee, co-founder of Fundstrat Global Advisors and a long-time cryptocurrency bull blames the irrational market for the ailing price points.
Lee per se ranted about the current position of BTC, in a note to investors published on Thursday. The note had had a mix of some surprising and some hopeful news for those who have been confused with the monumental drop of BTC in November. Notably, the drop in November became the worst losses for Bitcoin since August 2011.
The head of research at Fundstrat Global Advisors finds the current fall of the token $2500, significantly lower than what it should be. He claims that the fair value for the number one cryptocurrency by market capitalization should be between $13,800 and $14,800. To support his statement he cites a large number of active wallet addresses, how often BTC is used by accounts and the deflationary supply of the currency all pointing to a much higher valuation than the current price of $3400.
“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 argues that similar arguments are being made by analysts and supporters of cryptocurrency, while the prices are ailing the adoption and influence of the industry is expanding. The CEO of Galaxy Digital Holdings and Bitcoin bull, Mike Novogratz, expressed a similar sentiment in a conference call to investors at the beginning of the month.
He pointed out that despite a horrible year for token prices, which includes loss incurred by Galaxy Digital exceeding $130 million in 2018, he will stand by a strong outlook for the industry in 2019 and beyond. Lee also makes a similar statement:
“I fundamentally think you’re going to see big adaption in 2019, 2020. Lots of the items in the digital world, the e-gaming space, are low value items so I think people will be more comfortable participating in blockchain. We’re making big investments in that area.”
Lee and Novogratz both support the notion that the growth bitcoin and cryptocurrency adoption will eventually pull BTC and take the token for a bull run. Comparing the situation to the crash in internet stocks that occurred prior to wide-scale dissemination for both Wall Street and Main Street, cryptocurrency could be in the latency phase as investors and users wait for improved development.