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As BTC Plunges, Crypto Enthusiasts Keep the Faith

Dave Jackson Dave Jackson, Stockhouse
3 Comments| December 13, 2018


Click to enlarge

Over the past 48 hours, the Bitcoin (BTC) price has stabilized to around US$3,470 after dropping to a new yearly low at US$3,210 on December 7th.

On a weekly basis, BTC is up 6% but the cryptocurrency market has lost US$14 billion of its valuation against the US dollar, mostly due to the underwhelming performance of major digital assets and the plunge in the value of ERC20 tokens.

At press time, Ethereum’s (ETH) price has also recovered slightly, recording an 8% increase from US$83 to US$92. But, the Bitcoin Cash (BCH) price remains at an all-time low of US$94.

CLICK BELOW FOR LIVE CRYPTOCURRENCY PRICE INDEXES:

As regular readers of this column know by now, Tom Lee is one of the most bullish figures in the crypto space. And, he’s showing no signs of losing that bullishness for the future of Bitcoin. How enthusiastic, you may ask? Well, according to the Fundstrat Global Advisors research head, BTC's price should actually be around US$14,800.

Lee, who had previously predicted that by the end of 2018 we would see a BTC rally to a level about US$25,000, has been mostly undeterred by the world’s number one crypto losing around half of its value since then. He has, however, reduced his estimate to US$15,000.

As reported earlier today by Bloomberg, Lee's calculation is based on his "fair value" metric that takes into account the number of active Bitcoin wallet addresses, the usage per account, and other factors influencing supply.

"Fair value is significantly higher than the current price of Bitcoin," he said. "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."

His valuation model suggests that the price should now be between US$13.8K and $14.8K. Indeed, if adoption continues to grow, the price could potentially skyrocket past numbers reached just over a year ago (near US$20,000).

Lee went on to say that if Bitcoin wallets approach 7% of the total number of VISA account holders, BTC could be worth at least US$150,000.





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