Bitcoin’s current value is $3,312 but according to Tom Lee, it should be between $13,800 and $14,800. The ever-so-vocal Bitcoin bull believes that the currency is grossly undervalued and believes last year’s meteoric rise could be one of the reasons. In a note to Bloomberg today, Lee further refused to delve into his Bitcoin prediction for the year which seems quite unlikely as things stand. Earlier in the year, Lee predicted that Bitcoin would end 2018 at $25,000.
Bitcoin has seen a 5 percent drop in the past 24 hours to trade just above $3,300. In the top three Bitcoin trading platforms, BitMEX, CoinBene and Coinbit, Bitcoin was trading below $3,300. The currency is flirting with the $3,300 level again, having breached past that level on December 7 when it set a new yearly low.
Bitcoin Trading at a Fifth of Its Value
Much of the debate has centered on when Bitcoin is going to recover its former glory. This debate has been tough enough, but maybe we should be having another debate: what is the true value of Bitcoin?
Tom Lee, the head of research at Fundstrat Global Advisors, believes it should be just below $15,000. And he justified his assertion:
Bitcoin’s fair value, given the number of active wallet addresses, usage per account and factors influencing supply, is between $13,800 and $14,800
Well, Bitcoin is $11,500 below its ‘correct value.’ And according to Lee, the divergence in value stems from a number of issues, the first of which is its meteoric rise to record highs last year. ‘A meltdown in the macroeconomic climate and treasury sales during initial coin offerings’ are some of the other reasons there has been such a huge difference.
Moving forward, a rise in user adoption and acceptance of Bitcoin as an asset class will be vital to driving the value of the currency higher, he added. If Bitcoin hits just 7 percent of the 4.5 billion Visa account holders, its fair value would be $150,000, Lee stated.
Fair value is significantly higher than the current price of Bitcoin. In fact, working backwards, to solve for the current price of Bitcoin, this implies crypto wallets should fall to 17 million from 50 million currently.
After being asked if he has scaled down his Bitcoin prediction, he replied: “We are tired of people asking us about target prices.”
Lee had predicted that Bitcoin would end the year at $25,000. Following a steep decline in the currency’s value, he updated his prediction in mid-November to $15,000. While there are still two weeks left to the end of the year, it’s looking quite unlikely that Bitcoin will hit this level.
New York Bomb Threat and Bitcoin Ransom
While the currency was tumbling, it was making headlines for other reasons. According to the New York Police Department, bomb threats have been made across the country, and the people behind them were demanding for Bitcoin.
Turning to its Twitter page, the NYPD advised people to ignore the threats, which were being circulated via email.
Please be advised – there is an email being circulated containing a bomb threat asking for bitcoin payment. While this email has been sent to numerous locations, searches have been conducted and NO DEVICES have been found. pic.twitter.com/7omOs13Z7Q
— NYPD NEWS (@NYPDnews) December 13, 2018