Wall Street Strategy Guru Predicts Bitcoin Investment Trust To Triple In Value By 2022
Tom Lee, a Wall Street strategist has recently stated that if his predictions prove to be right, then the value of Bitcoin Investment Trust (OTC: GBTC) can triple by 2022. Lee, the co-founder of FundStrat Global Advisors, a market strategy firm has already earned accolades for being a Bitcoin bull and stock market bear at the same time. He has set a price target of $25,000 for Bitcoin to reach in 2022 which he has even termed to be “conservative” as he stuck to the price target even when the cryptocurrency market was undergoing major upheavals during the recent Chinese ban on ICO activities and cryptocurrency exchanges. At the time of publishing this article, Bitcoin price was $5750 with a market cap of $95,851,602,815.
According to Bloomberg reports, Lee is advocating a triple value boom of the share price of the Bitcoin Investment Trust which is a publicly-traded platform. Presently, this flagship product owned by Barry Silbert’s Grayscale Investments is the solitary publicly-quoted bitcoin investment vehicle available for institutional investors in the U.S. market. In stark contrast to the firms which have deposited an application for Bitcoin ETF’s although none of the same have been approved, GTBC directly holds the underlying assets rather than trading in derivatives contracts.
The trust’s shares traded at a significantly high premium over and above the net asset value (NAV) of the underlying asset. This has created much speculation about the trust’s value among its investors. GTBC shares doubled over NAV at one point in August although its momentum diminished by 20% in October. Lee recently stated that, “GBTC at $688 and with 20% NAV premium is an attractive way to gain exposure to bitcoin,” in spite of the same being traded at high premiums. He also added that the NAV spread is not accurate as it does not have any role to play in determining the value of airdropped coins from bitcoin gold and bitcoin cash or altcoins created as a resultant of Bitcoin hard forks. These assets added up to $53 to the GTBC share NAV at the time when Lee drafted his report.
However, Lee did issue a note of caution to investors stating that market panic might cause GTBC to face an acute liquidity crisis. “What could go wrong? The biggest risk, in our view, is the GBTC, as an ETN [exchange-traded note], could face a liquidity problem -— if there is an all out panic. But given the highly audited custody of GBTC and its underlying bitcoin holdings, we see this as a short-term issue,” he added.
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