While cryptocurrencies have been mostly accused of encouraging speculators, Tom Lee of Fundstrat Global Advisors says that crypto isn’t speculative enough. He shared his thoughts on cryptocurrency speculation at the Bitcoin 2022 conference.
How cryptocurrency isn’t speculative enough?
According to Fundstrat, crude oil trades 31 times on speculation, which suggests that each barrel of crude oil is traded 31 times before being consumed by refineries. Cryptocurrency, on the other hand, is projected to be speculated 2.5 times each coin. In the case of the US dollar, the present level of speculation is 96 to 1.
The amount of crypto speculation is relatively small in comparison to the other assets.
Bitcoin volatility may fall: Tom Lee
As Bitcoin’s market value rises, Lee anticipates its volatility to fall considerably in the next few years. He drew comparisons between the world’s most valuable cryptocurrency and gold. The volatility of the yellow metal decreased as it attained a market capitalization of $10 trillion.
Although Bitcoin’s market capitalization is currently a fraction of that of gold, industry experts such as Galaxy Digital CEO Mike Novogratz predict that in the next few years, the flagship cryptocurrency might become the dominant store of value.
Bitcoin price forecast
Lee projected in February that the price of Bitcoin could reach $200,000, saying that speculative capital would flood into the cryptocurrency. Last year, the founder of Fundstrat predicted that Bitcoin would reach $125,000, but it only reached $69,000.
Lee is no stranger to incorrect Bitcoin price forecasts. In 2018, he predicted that the price will exceed $25,000 before crashing.
