At least that is the latest conclusion from one top Wall Street Strategist.
Tom Lee is the first major Wall Street Strategist to issue a report solely dedicated to Bitcoin and Bitcoin's future price.
Ironically, Lee has been one of the most bullish strategists on the US stock market over the last several years, but just recently has turned to one of the most bearish on the street.
His price targets for Bitcoin are anything but bearish...
Tom Lee predicts that based on his models, Bitcoin could hit $20,000-$55,000 by the year 2022.
Yes that is quite a large range, but either way, that represents massive returns from current levels.
Some might read this as just another analyst throwing out some numbers to see his name in the headlines. However, I have followed Tom Lee for some time now dating back to my time trading stocks for a private equity fund, and he's the real deal.
This guy has been right an awful lot and I encourage you to go back and look at some of his recent calls. You will find that he is right far more often than he is wrong.
How does Lee get to that price target, you may ask?
According to Lee it's quite simple:
"We believe that one of the drivers of Bitcoin prices is that cryptocurrencies are cannibalizing the demand for gold. Based on this premise we can take a stab at establishing a valuation framework for Bitcoin. Based on our model, we estimate that Bitcoin's value per unit could be $20,000 to $55,000 by 2022."
Gold's total market value is $7.5 trillion, which is substantially higher than Bitcoin's current $41 Billion.
That is all well and good but then when you look at good ol' supply and demand, things start to swing in favor of Bitcoin.
The current supply of Gold is surging as mining has been soaring to new all time highs. As the price of gold goes up, more supply comes on to the market thus pulling the reigns as price increases.
Bitcoin is exactly the opposite.
As time goes by the supply of Bitcoins keeps slowing. The total number of Bitcoins ever created will be 21 million, and it will reach that number by roughly 2040. It will actually reach 98% of that number by 2030.
Basically the supply of gold is ever increasing and the supply of Bitcoin is ever decreasing.
The supply of Gold to outpace the supply of Bitcoin
According to Lee, a simulation shows that Bitcoin supply will start growing slower than gold's as soon as 2020, all the while with a much smaller market cap.
The constraints on Bitcoin's supply is a big reason for it's potential. Combined that with ever increasing use cases and you have the potential for a digital currency with high demand and a limited supply, which will drive up prices.
While the supply and demand aspect will get it part of the way to his price target, Lee says there is one aspect that really will be a game changer...
According to Lee, Central Banks will start buying digital currencies when/if the total market value eclipses $500 Billion.
As part of his thoughts, Lee referenced a recent news article about Central Banks looking into the possibility of owning digital currencies.
It can be read here:
According to Lee, this will be the real game changer when they start to get involved in a big way.
It will enhance the legitimacy of the currencies as well as likely accelerate the substitution of cryptocurrencies for gold by investors.
Conclusion:
Basically, substantial upside exists in owning digital currencies at current prices. :)
Stay informed my friends!
Sources:
http://www.cnbc.com/2017/07/07/strategist-tom-lee-weighs-sees-bitcoin-going-as-high-as-55000.html
Image Sources:
http://thinkaboutnow.com/2016/06/the-horrendous-truth-about-central-banking/
https://www.technologyreview.com/s/600980/a-bitcoin-style-currency-for-central-banks/
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It is interesting how they do go hand and hand. I sold a lot of my silver stack to buy into crypto and I am not going anywhere. I don't even look at silver coins anymore. I am addicted to this now! There is correlation!
I saw there was a silver crash flash crash the other day, hopefully you were out before having to stomach that!
I still have a couple hundred ounces nothing much. I had too much anyway! It is way too bulky, you have to keep it in a safety deposit box. I am 40 and the funniest thing is explaining crypto to my parents in their early 70's. Just funny!
That is hilarious! I have the same problem when I try to explain crypto to my parents. They probably think I'm crazy haha.
I too bought in heavily to the precious metals craze in 2011 or so. The world was full of doom and gloomers and I was going to make a fortune! The problem with precious metals is to make that fortune you have to pray for world anarchy (Zombie apocalypse). With crypto that is not the case as the newer more efficient currencies are starting to be a faster, cheaper way to do business and not just a store of wealth. (my own personal experience of this is the difference between using crypto to send money overseas vs going down to my local bank. You will lose at least $20 and your mind doing it!) My parents would certainly have understood that.
I am 50 and I keep my gold and silver and grow my crypto balances by converting paper into crypto. I think both have value but for different reasons.
If I may, please allow me to dispute a couple of your assertions. First of all what you describe is chaos, not anarchy which is a condition of self-governance. It literally means without "archy" or systematized rule such as monarchy, oligarchy, whatever. See here:http://www.dictionary.com/browse/-archy Secondly, chaos is not necessary for silver and gold to reflect their true values. All that is necessary is a free and fair market without intervention from the globalist banking cartel. I'm not against cryptocurrencies. What is appealing about cryptos is that they are equity based, not debt based like all the central bank currencies of the world today. If you don't know what that means then you should investigate it. A good place to start would be www.positivemoney.org Beyond this, cryptos are, at least for now now, outside the globalist banking cartel's control. But that will change when derivative contracts start trading on cryptos and when central banks start buying it or issuing their own. The LAST thing crypto investors should want is any kind of involvement by the banking cartel because it will only be for the purpose of infiltrating, compromising and controlling it, putting humanity right back in the cartel-controlled box.
I'm glad that you brought this up. I remember reading years back how major banking institutions would adopt the block chain and I though to myself, well that's bitter sweet. Although, I think that crypto and the block chain were designed as a way to break free from central and global banking mafias, it's almost inevitable that both parties will merge. However, this doesn't have to be a bad thing and I am glad to see the people shaping the demand for transparency and sustainability which is simultaneously forcing institutions to reinstate their value systems they should've had a long time ago.
Touché @Maxam. I understand that modern currencies are underwritten by debt however I do not see why Digital currencies are necessarily equity based . I will look up the link you provided thank you. As for precious metals being manipulated I would 100% agree particularly silver. However It is still better to have it than not because in the unlikely event that the current "Archy" folds then PM prices will float without interference. So it is a perfect hedge. They are artificially holding the price low and we are acquiring a physical commodity cheaply. I just don't wish for the time when we will profit from it.
Cryptocurrencies are "equity based" because their creation is the result of work and investment - algorithm solutions, mining equipment investment and electricity. Bank created currencies are debt based. They exist only because someone somewhere took out a loan from a bank. The money received from that loan is simultaneously the borrower's debt and the bank's asset. The borrower then pays someone else from the money borrowed, thereby doubling the amount of money in the banking system. This new deposit will be used as an accounting entry reserve which will be used to justify additional loans to create additional debt money. And the process continues ad infinitum, creating enormous bank profits out of thin air from this fractional reserve, debt based, bank money system. In our present system, all money is debt. Welcome to systematized enslavement by debt.
too late, they should have invested earlier if they wanted too. Lets see what happens, it will be beneficial for us either way
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I'll be pro crypto till I die and this news is just good news to me. yes, the limited and unmodifiable supply of Bitcoin makes it an attractive store of value... there's also one factor to consider: the rising population of humans, who add value to currency... the more people are born, the more value there is and the more demand for Bitcoin, which leads to higher prices... thanks for sharing your thoughts.
Interesting thoughts. Thanks for sharing :)
Yes. I agree with you
I'm not sure why a central bank would buy crypto currency. That makes no sense from a monetary policy standpoint. If they buy cryptos, they have to sell their own currencies, which makes the value of them go down. Since one of the primary goals of any modern central bank is price stability, their purchase of cryptos seems unlikely. I get and agree with his arguement about substitution of gold with cryptos as a store of value, but his central bank prediction is very flimsy.
My guess is that it has to do with most government's classification of Bitcoin as an asset similar to gold as opposed to a currency. I would imagine they would buy virtual currencies for the same reason they buy gold?
The reason central banks might buy cryptos is to have a supply which can be used to short it for price control purposes. The only other reason would be if they are either overtly or covertly behind the creation of one or more cryptos using them as a way to further consolidate their economic and social control. It is easily conceivable that the central banking cartel does indeed want the public to adopt cryptocurrencies, but their end game will involve cryptos that track and control every human being in a new form of technotronic enslavement. Those who love liberty will love cryptocurrencies which are in no way connected to the banking system.
To short an asset, you borrow it and then sell it. I'm not getting the buy to short rationale. I think @jrcornel has a more plausible explanation. If a crypto becomes some sort of international reserve currency, then I could see central banks as owners. I'm not buying the technotronic enslavement conspiracy of the central banking cartel. The central banks of the world have not been able to agree on a lot in recent decades. Look at Basel banking regulations, post 2008 crisis monetary policy, etc.
I made a very similar prediction just days before that guy said it. My prediction was $20,000-$50,000 by 2021. I'm leaning more towards $20,000 not because Bitcoin couldn't reach $50,000 if everything went smoothly, but because I think Bitcoin's share of the cryptocurrency market will continue to fall in relation to other cryptocurrencies. If that weren't to happen, then it could reach $50,000. But I think many great altcoins are yet to appear, and some of the existing ones, like ETH, will continue to mature and evolve, and potentially surpass Bitcoin in many ways. However, I still expect Bitcoin to remain top coin until 2020 or so.
I think central bankers will probably be late to the game. If market cap hits $500 billion, it will be because of private sector drivers. I also think that price estimate for 2022 is a bit conservative if people really do substitute BTC for gold in the coming years. The market for asset conserving instruments is about to explode during this time. Gold will probably explode as well. As government fiat begins to crumble we'll see a rush to safety. Up until now that has largely meant USD, but that too will fall at some point as more Vallejos and Chicagos continue to manifest. People will be scrambling for any place to put their money except government fiat.
Good points. I am betting on him and you being right ;)
you're totally right -- previous bubbles and their bursting (from Dot-com's in 2001 to Real Estate's in 2007) are living proof of that.
With the advent of Crypto, there will be myriad new markets outside Fiat in this entire new asset class of its own to invest in, and with people scrambling to get in on that one prices will inevitably do very nicely! Good for everyone getting in early.
Ive been telling people for a while how undervalued cryptocurrencies are, and i think a large number of people assume that im trying to hype it up when i say these things, people dont understand that rich people are taking notice and are now talking about cryptos in a positive light, which is a HUGE market indication that they own large stake in the coins now
If bitcoin and ethereum mining continues how its been going over the last few years and shows no sign of stopping, its LOGICAL that the prices will continue to rise, we havent seen ANYTHING yet.
i read a few days ago that ethereum will eventually hit 3,000 a coin, and nothing about that surprises me, if you havent been paying attention, i hope you are now, because billionaires are about to be made
We had seen the performance of Bitcoin from months now and the trend of up side now will continue even more faster as big players comes.
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We don't need banksters. Crypto is already manipulated with whales and imagine if banksters pop in. It will be carnage. Yes, we might get a more stable market but that stabillity will be sustainable only if it fits their market manipulations and needs. We need more common people in this sea not banks and already too powerful people. Crypto was created to oppose those!
Gold is also traded in the futures market. There are now 293 paper ounces traded for every ounce of physical gold.
This allows for massive manipulation. Banks can bang the bid all day long especially during low liquidity market hours and crush the price down.
With Bitcoin this is not possible.
Not for long.
If the markets ever find out that only just a first Central Bank started buying Bitcoins: Moon.
Good news for crypto lovers....
Good news...
interesting prediction
Exciting potential. HODL my friends.
Great news!
Just saw this in my first Chat Room peak...Resteem!:)
Great read!
I just got 50 oz of silver at the low prices we are seeing today. I think both markets are correlated.
very good
@haji
Thanks for sharing.
just a great news
It is very hard to predict the price. I wish 50 000 USD per Bitcoin, but it is still very risky. Bitcoin can go down back to 500 USD.
Given the current situation, if you compare to lets say the dot com bubble it is highly unlikely to go back to 500 USD at this stage, we have a long way to go as it hasn't even reached its full potential yet.
WoW !!!
beautiful
Soon
BTC is great.. no one can stop it..
Of course the banks are going to buy them, they are afraid of losing their power. And of course they will lend bitcoin that they do not have to earn interest. In any case it is necessary to hold. I will follow you because I like your news.
Banks are trying to create their own... Ethereum.
Bitcoin for the people!
this is why one should be wary of both Ethereum and Ripple. (Maybe equally wary of Stellar, too.) Getting into and holding the real thing, meaning truly decentralized peer-to-peer Crypto coins is the way to go and be safe from that whole government fiat show!
Etherum is from bank? I am fan of Litecoin.
Over 30 large corporations such as Microsoft, Intel, ING and JP Morgan Chase have formed an alliance around the blockchain-based financial system Ethereum the Enterprise Ethereum Alliance (EEA.)
Smells like and looks like the illuminati is written all over it. Could be a good reason to invest and ride the wave since they are going to push it.
nice
Just remember that once they start buying into the market, they can begin price manipulation. Be wary my friends.
there is no straight forward way to value crypto. Nice article
Not sure how gold and bitcoin could be compared since the first is manipulated af. Anyway really interesting stuff going on around cryptocoins. Great article @jrcornel!
It probably has to do with it's classification as an asset as opposed to a currency by most governments. In that regard it is more comparable to gold than to other currencies.
Makes sense, thanks man.
You better believe banks are already buying crypto.
If banks start buying crypto currency, its price will be just above the clouds!
Nice post I like with your post
Great article! Thanks for posting.
What a valuable read! Thank you!
Warm news is good to read
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And it's 5 years from now only.
I know I'm going to keep on holding on to my bitcoins so that in the future I can sell them for those figures :D! Great post
Very interesting article. Thanks for sharing.
well i agree to some extent thta bitcoin will pass 50k in the next years thanks for this post i had to follow you
Some people say that by 2020 bitcoin would be the hundred thousands
Thank you for sharing, very interesting steem
i can see they will have too invest into crypto - do you think it would be bitcoin?
well i hope it touches the upper end of the projected rate...
Well, that's a new one. May be the banks have been realising the real value of cryptocurrency but still there's nothing which can affect bitcoin pricing in the short term. Crypto currency are highly volatile as it is decentralized. It means it is controlled by common man and people will always use it for their own benefit. Nowadays the market is in kinda recession because people are panicking over segwit hype. So, there will always be hype about bitcoin and there will always be falling and rising of market. Banks will not be able to do anything. May be in future government would centralize it, then what would people do?
Thanks for the article though @jrcornel
I tend to the version that it will be something like this. Thanks for info!