Tom Lee on Bitcoin: ‘Fair Value’ Is ‘A Lot Higher Than Where It Is Today’

Siamak Masnavi

On Friday (February 8th), Thomas Lee, a Managing Partner and head of research at independent research boutique Fundstrat Global Advisors, delivered his firm's outlook on the crypto market in 2019.

A day earlier, Bloomberg had reported on a research note by Robert Sluymer, a Managing Director and Technical Strategist at Fundstrat. In this note, Sluymer had written:

“The price structure for most cryptocurrencies remains weak and appears vulnerable to a pending breakdown to lower low."

Furthermore, he had said that for Bitcoin (BTC) the key support level to watch was $3,100:

"A break below the fourth-quarter lows at $3,100 would imply a decline to $2,270, while a move above $4,200 is needed to signal Bitcoin is beginning to improve."

Unfortunately, this got misreported in some news outlets, which upset Lee, who sent out a tweet to criticize this type of "fake news," and then to clarify his firm's outlook on cryptocurrencies in 2019, on Friday, he sent out a couple of more tweets, which referred to a research report that his firm had published earlier that day:

 The key takeaway from this tweet is that Fundstrat believes that "many of the headwinds of 2018 are turning into tailwinds", with a significant recovery rally in the crypto market expected to take place before the end of the year.

The next tweet showed a chart from the report that showed how some of those factors that acts as "headwinds" in 2019 had turned into "tailwinds" in 2019:

Also, on Friday, Lee, who has a reputation as a "permabull", gave an interview to CNBC, and was naturally asked about his latest forecast on Bitcoin. Here is how he answered this question:

"We just published our outlook today for Bitcoin, and we described how [from] the 10 things that became headwinds last year, seven of them are becoming tailwinds. One of them is that there is more visibility on an ETF approval. We actually got an SEC Commissioner talking about that today, and these things are positive for crypto."

One of the hosts didn't want to let Lee got off the hook so easily, and asked him how he could be confident about setting a price target on Bitcoin given that he had been wrong in his price forecast for Bitcoin last year. Lee replied:

"Yes, well, crypto is tough because it's not price-to-book; it's based on network value. So, we're declining to establish a price target... the fair value... is a lot higher than where it is right now."

 

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