On Thursday (April 4), Thomas Lee, a Managing Partner and Head of Research at independent research boutique Fundstrat Global Advisors, talked about Bitcoin (BTC), and said that its current “fair value” is $14,000.

Lee’s comments came during an interview on CNBC’s popular morning news and talk program, “Squawk Box”, which was being hosted on this day by CNBC anchors Becky Quick and Andrew Ross Sorkin.

Lee was invited to the program to talk about the Bitcoin rally that started on April 2, and what it could mean for Bitcoin for the remainder of 2019.

Lee started by looking at the drivers behind the surge in BTC price to over $5,000:

“Bitcoin had a rough 2018, and for much of 2019, it’s been steadily climbing. And from what we can gather, it’s because there have been positive things taking place, you know, like a lot of the old whale wallets are buying Bitcoin. So, it’s been slow accumulation and steady accumulation.”

He explained that by “old whale wallets”, he was referring to the “original owners of Bitcoin”, some of whom had liquidated their holdings in December 2017 when the Bitcoin price reached almost $20,000, and who now seem to be buying back Bitcoin. 

He then continued by listing some of the other factors behind this price rally:

“And then we saw positive developments, like Bakkt is coming… activity has been picking up, especially in regions where there’s been a lot of inflation or political issues, like Venezuela and Turkey, and I think we finally had a big move on April 1 [actually, it was on April 2]… wasn’t clear what caused it, but it was real evidence that there’s a lot of dry powder. The crypto community kept a lot of cash, was waiting for Bitcoin to break $3,000. When it didn’t, …”

At this point, Sorkin interrupted Lee to ask how important it is for the U.S. Securities and Exchange Commission (SEC) to approve a Bitcoin ETF.  Lee replied that it would be “a huge positive development” if/when it happens, but it would probably come “a lot later than any of us expect.”

Next, Sorkin asked Lee if Bitcoin’s April price rally could be partly explained by what is happening in the U.S. stock market.

Lee answered:

“It feels like there’s a catch-up rally because the S&P move, year-to-date, is two standard deviations. You know, it’s like the 10th best in the history of the stock market first quarter… And if Bitcoin rallied two standard deviations, it would be, you know, close to $19,000.”

He then talked about Bitcoin’s fair value:

“So, if you were to take a combination of active addresses and activity per user, that’s explained over 90% of Bitcoin since 2013. The fair value for Bitcoin, right now, is $14,000.”

On February 8th, when delivered Lee his firm’s outlook on the crypto market in 2019, he sent out this tweet:

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:


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