Notorious Bitcoin Price Predictor Tom Lee Talks About How Hard It Is To Forecast BTC’s Future Value
Predicting About Cryptos Is Very Difficult According To Tom Lee
Tom Lee, the founder of Fundstart recently spoke about the crypto market to Ran NeuNer for CNBC Crypto Trader.
Lee is a well-known figure in the financial sector. His contributions are never taken lightly because of his wealth of experience in investments. Earlier, he had said that there is a 10-day window for massive investment in Bitcoin every year. Investors who hold during this ten-day period will benefit the most from trading. He encouraged investors never to empty their portfolio no matter how low the price of BTC is going.
In his words:
“I think that assuming digital assets are early stage, people have to have a portion of it as long-term holdings instead of trading it. Because if you don’t own Bitcoin for the best 10 days in any year, your annual return is -25% a year. So Bitcoin’s a losing asset most of the year, and then 10 days drive all the return.”
He further added the current state of the market.
“The best way to measure that is, let’s say crypto is really sort of transforming the financial system and one benchmark is visa because there are five billion roughly five billion visa and cardholders. There’s probably at most 50 million active crypto wallets today.”
In 2018, Tom Lee had anticipated that Bitcoin will skyrocket beyond $25k, but in November the same year, he came out to lower his target to $15k. Now, he notes that the recent rally in the S&P 500 and small-cap stocks were greater than two standard deviations (a measure of market volatility); adding that 1 standard deviation for BTC would equal a 185% gain and this BTC “catching up” with equities would suggest a price point of $10-20k.
“We believe 2019 is a year of repair, setting up for a strong recovery in crypto prices broadly in 2020. Any improvements in supply/demand dynamics are positive for prices and hence, the slowdown in ICO funding is a net positive. The sentiment is also quite muted, which is positive.”