Fundstrat'southward Tom Lee believes Bitcoin (BTC) volition accrue price value post-obit a similar logic to the Silicon Valley tech titans.

During an interview for CNBC's Street Signs Asia on show on Nov. fifteen, Lee argued that cryptocurrencies "are network value assets" — and share this with the earth's most successful tech stocks.

"Network value avails"

Lee — a renowned Bitcoin bull, co-founder and Wall Street strategist at Fundstrat Global Advisors — made his argument when asked well-nigh the logic backside Fundstrat's $25,000 by 2022 forecast for Bitcoin.

Noting that the number was fix in 2017 as part of a v-year forecast for the nugget, he said he even so recall it's "quite like shooting fish in a barrel to accomplish":

"Cryptocurrencies are network value assets, significant the more people hold the asset, the greater the value. In fact, it's a log role — so if you double the users hold it, you get a quadrupling of value. To go to $25,000 you essentially demand a petty less than 4x ascension, which ways yous need to double the number of people who hold Bitcoin."

Lee said that Fundstrat estimates that roughly half a million people own and utilize Bitcoin so that you would need to hitting a million users to get a $25,000 valuation.

Noting that this is substantially a utility function, Lee drew an analogy with the performance of FAANG (Facebook, Amazon, Apple, Netflix and Google) stocks since their public listing. He said:

"70% of their render [since public list] is explained by the growth of the global internet in that period of fourth dimension. In other words, information technology's a LOG function of the internet's growth, and that'southward how cryptocurrencies are going to work."

Institutional entrenchment

In terms of other factors, Lee said he was very bullish on Bitcoin in the long term, saying he thinks it's at present "still the earliest days for digital avails" and that over time they'll become highly institutional and an established asset class.

"Once we hit that information technology's another hockey stick," he said, somewhat disconcerting his interviewer with the metaphor.

In October, Lee argued that having made a big movement at the start of 2019, Bitcoin now needs to consolidate its gains.

That same calendar month, the strategist proposed that Bitcoin is positively correlated with the Due south&P 500 market index and is thus not a hedge confronting macro turmoil, as some argue.