Fundstrat’s Thomas Lee on Bitcoin (BTC), EOS, Stellar Lumen (XLM), Dogecoin (DOGE), and XRP

Siamak Masnavi

Thomas Lee, a Managing Partner and the Head of Research at Fundstrat Global Advisors, recently had an interview with crypto influencer Heidi Chakos, the owner of the popular YouTube Channel "Crypto Tips", during which he presented his latest thoughts on Bitcoin (BTC) and altcoins (in particular, Stellar Lumen, EOS, and Dogecoin). 

Here, we look at some of the key highlights from this interview.

Interesting Correlations Within the Crypto Markets

"Yeah, there are some things that surprise us.In general, doing research for 25 years, I've learned that the crowd is mostly right. So, I do think, for the most part, what people believe is generally usually going to be correct... But there are a lot of times when divergences or extremes are where interesting correlations can be found...

For instance, Bitcoin mining break-evens... the way we define it in our data science team is the cost of mining plus the cost of electricity plus the transmission cost of electricity plus the overhead, and that gets to around $6,000 Bitcoin right now... I don't think it's a coincidence that Bitcoin is holding $6,000. I think it actually acts like mining [cost] is the floor for Bitcoin. In 2014, just to give you perspective, $180 was the break-even cost for Bitcoin... and in 2013-2015... Bitcoin bottomed around $180...

Miners are in the business of Bitcoin mining because they actually believe in the project. So, what they know is that at $6,000, they are pretty much only going to sell the bitcoins they need to pay their staff, but they are actually more likely to want to retain it, especially because they know Bitcoin can violently move upwards... So, I think miners here are trying not to dump their bitcoin."  

What Lee Thinks About Metcalfe's Law Determing Bitcoin's Price

"The idea is that something like Bitcoin or Facebook or anything that relies on other users, if you keep doubling the number of users, the value of the community doesn't actually double, it grows up by an exponent factor. If you double the size of the community, you actually get a 4X increase in the utility of it...

So, to Nic's [i.e. Nic Carter, co-founder of Coinmetrics] point, wallets is the same metric. Bitcoin only has 50 million wallets... We've shown that one variable, [number of] wallets, close to 72% explains Bitcoin's price change since 2009."

The Correlation Between the Price of Bitcoin and Altcoins

"Correlations between cryptocurrencies is very high. So, like if Bitcoin is rising, everything goes up, and when Bitcoin falls, everything goes down. There is some differentiation, a little bit more than we realized. For instance, year to date, only three tokens have had an increase in daily active users, or what we call Daily Active Addresses, which is Stellar Lumen, EOS, and Dogecoin, and they are the three best performing tokens this year. 

So, there is a fundamental variable for some of these projects that have quite a lot of activity, but then some of the 1500 tokens on CoinMarketCap barely have any users. So, I think they are going to be trading relative to Bitcoin, because if they don't go down when Bitcoin goes down, it means that they are outperforming, and if they don't have an active community, they should be falling. So, I think... if you can find projects where the community is not only active but growing... those are going to be the best performing projects...

An example is DOGE... Another one that I think... deserves some credit is XRP because there is a very active community there."

Security Tokens

"We communicate with the traditional markets... the bulk of our clients are traditional investors. They have a lot of interest in security tokens, and maybe not because those things can go to the moon... security tokens can't really have the same upside as a Bitcoin, but it allows them to either invest in things that are traditional equities, [like] single buildings or intellectual property... It's probably going to be a big area. I don't have a strong view because I think there's still some uncertainty on the regulatory side of that."

Price Prediction for Bitcoin

"I think people are too bearish. What happens is that people get bearish because it makes sense... I mean, markets have been terrible, and we are below our 200-day [moving average], and we published a report this week showing that when Bitcoin is below its 200-day, it only goes up 50% of the time in the next six months, and when it is above its 200-day, it's up 80% of the time...

But Bitcoin's break-even by the end of this year is going to be close to $8,000 or $9,000, and historically, it's traded at 2.5 times that, and so that's how we get the $22,000 [price]...

We believe Bitcoin has bottomed because we think that $6,000 is the floor... The one thing that everyone's psychology going to do is immediately give a 100% probability to the negatives, and they give the lowest probabilities to the positives... 

I know a lot of people think that Bitcoin could collapse to $3,000... I think what's more probable is that we have a very explosive increase in price."


Featured Image Courtesy of Fundstrat Global Advisors

Kanye Says He Wants to Run for President, Bitcoin Fan Elon Musk Endorses Him

Siamak Masnavi

American rapper, singer, songwriter, record producer, composer, entrepreneur and fashion designer Kanye West celebrated July 4, U.S. Independence Day, by announcing his intention to run for U.S. president in 2020.

So how did Kanye launch his bid to be on the ballot at the 2020 United States Presidential Election, which is scheduled for 3 November 2020?

Well, late on Saturday afternoon (California team), Kanye sent out the following tweet:

Minutes later, came this endorsement from Tesla and SpaceX CEO Elon Musk, who has often expressed his interest in cryptocurrency in general and Bitcoin in particular:

Not wanting to be left out of the conversation, a couple of hours, American media personality, businesswoman, socialite, model, musician, and actress Paris Hilton made it clear that she would not mind being U.S. president either:

As FOX News reported a short time ago, this is not the first time that Kanye has expressed his intention to become U.S. president.

Apparently, back in November 2019, at the fifth annual Fast Company Innovation Festival in New York City, he said that he planned to run for U.S. president in 2024:

"When I run for president in 2024, we're going to definitely -- yo, whatchu [sic] all laughing at? When I run for president in 2024, we would've created so many jobs that, in fact, I'm going to walk...

"What I'm saying is, when y'all read the headlines, 'Kanye's crazy,' this and that, this and that, it's like one in three African-Americans are in jail and all of the celebrities are in jail also because they can't say nothing [sic]! They've got no opinion! They're so scared!"

According to the U.S. Constitution, here are the requirements for presidential candidates:

  • be a natural-born U.S. citiizen
  • be at least 35 years old
  • be a U.S. resident for at least 14 years

Since Kanye meets all these requirements, he is allowed to declare his candidacy for president. After he has raised or spent more than $5,000 for his campaign, he must register with the Federal Election Commission.

In May 2018, Kanye talked about Bitcoin during an interview with American radio presenter "Charlamagne tha God". 

He said:

"When you're acting in love, you're like a drop of water and you have the ocean as your army. When you act in fear, it's just you and your money.

"Now you can take your money and put it in Bitcoin, put it in credit form, put it in cash... and then stand up to the ocean and who's gonna win? 

"We definitely are dealing with racism but I want to push future concepts, you know.

"Now I'm doing I'm giving you two streams of consciousness in one. I want to talk about my wife. I also want to talk about Harriet Tubman on the twenty dollar bill... That's the moment I wanted to use Bitcoin."