Fundstrat Global Advisors analyst and former permabull Tom Lee is a fan of bitcoin.
The strategist, who recently turned cautious on stocks, explained his bullish view on the digital currency during an appearance Wednesday on CNBC’s “Fast Money,” claiming that a single coin could someday be worth as much as $50,000.
Fundamentals - Lee - Bitcoin - Nature - Store
Starting with the fundamentals, Lee said that Bitcoin’s decentralized nature makes it a “good store of value.”
This is why bitcoin could be the new gold: Tom Lee from CNBC.
Study - July… - Bitcoin - Lot - Characteristics
“We did a study and published it in early July…[bitcoin] has a lot of characteristics that are similar to gold and will ultimately make it attractive as an alternative currency. It’s a good store of value. The encryption and the distributed ledger not only act as a means of protection, but it actually has an industrial use that could be replacing a traditional payment platform.”
Then there’s the scarcity argument. Approximately every four years, the number of coins awarded to the miners who process transactions on the bitcoin network decreases by half, making bitcoin an inherently deflationary asset.
Supply - Bitcoin - Years - Number - Coins
“The supply of bitcoin is starting to slow. Within the next 2-3 years the number of coins discovered or mined or rewarded will be slower than the amount of gold discovered, so bitcoin will be a rarer unit than gold.”
“There’s $7.5 trillion worth of gold out there, so gold dwarfs the currency in circulation, and if bitcoin captures just five percent of that alternative currency, it could fetch as much as $25,000 to $50,000 a share.”
Bitcoin - Trading - Highs - Lee - Asset
Even with bitcoin trading near all-time highs, Lee says it's still “an under owned asset” with “potential for huge institutional sponsorship coming.” Lee added that he expects it not only to outperform stocks, but to become the best-performing asset of 2017.
“Yes, because there’re catalysts. Institutions have to directly buy the coin...
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