Tom Lee (head of research and co-founder of Fundstrat), has just been interviewed on a range of topics concerning the state of the cryptocurrency market.
Lee speaking on YouTube’s Crypto Tips, started off by clearing the general criticism surrounding cryptocurrencies that speculators were crowding the market.
He said: “In general, when people in traditional markets look at crypto they think this is purely speculation and the only reason why people buy crypto assets is speculation. And, of course, once you get to know the community, that’s not true. I think there’s actually a lot of people who really believe there’s something wrong with traditional financial systems, and they’re trying to re-architect it. But what people also overlook is that in traditional markets, whether it’s stocks or bonds or currency or gold or oil, that we can measure how much money is traded on speculative purposes versus actually-used purposes.”
Lee said that, every barrel of oil utilized to power card is traded 40 times as a form of speculation by Investors, while every dollar is traded 240 times as a form of speculation in various financial markets. From his analysis, 40:1 is the gold speculation-to-use ratio. Concerning blockchain crypto transactions, his analysis reveals a relatively low speculation.
Lee, though confirmed that there may be some truth about those criticisms concerning the cryptocurrency space, due to reasons such as exploitation and scams as well as the potential for unethical behavior, it doesn’t still mean that the technology is just for the dark web: “There’s potential for someone to be unethical because these are bare instruments and it’s anonymous, but I would say that it’s not true that just because these features exist that it’s only used by criminals.”
Lee also commented on the widespread adoption of cryptocurrencies, explaining why doubling the number of bitcoin users and other cryptocurrencies present in the market will lead to an exponential growth over time. As cryptocurrencies keep breaking through and reaching further into the mainstream, positive use cases coupled with ways transactions can be facilitated and improved upon are coming into light.
Lee has also given an explanation to why the price action of Ethereum got hit. He feels it was as a result of the confluence of the pressure felt by the Ethereum-based ICOs to sell their treasures and the negative press, Bitmex futures, issues and Ethereum’s roadmap delays.
Lee, looking at crypto’s bigger picture says that Bitcoin is “redefining the plumbing of the financial industry.” This is majorly because Bitcoin, for its services charges a price too high.
Lee also commended Tether for making great impact in the cryptocurrency Markets and that, in contrast to what several academic papers have written, Bitcoin price actually rose when Tether plunged some days ago, which has disproved theories stating that BTC is kept in position and supported using Tether.
As regards bitcoin price, Lee says its firm believes Bitcoin has found its bottom at around $6000. At the start of 2018, Lee predicted that by the time the year comes to an end, there will be an increase in Bitcoin price to $22k, a prediction which will he still sticks to, despite the current price of Bitcoin stated at $6,463.
