FundStrat's Tom Lee revised his 2018 end-of-year forecast from $25,000 to $15,000. Bitcoin is now $5,646, and Lee waited for a 59 percent decline (YTD) to make that revision. Google Tom, and he's seem to have replaced James Altucher.
Before the $25,000 2018 target was implemented, Lee was on Money Insider a little more than a year ago. His primary thesis was Metcalfe's Law as bitcoin was undergoing its mania phase. This law, originally used in telecommunications, states that a network is proportional to the square number of its users. That didn't pan out so well because as prices throughout the crypto-currency space cratered, it was revealed that transactions using bitcoin equally cratered.
So, if we were to apply Metcalfe's Law that would seem reasonable. Interest just caved. It was less appealing than ramen.
But wait... you get lots of airtime on CNBC if you like bitcoin. Tom needed something new to promote higher bitcoin prices: a magical multiple.
Tom now uses a 2.5x multiple on mining costs. There is no magical multiple.
Does bitcoin have utility? Some. To what degree is still up in the air. As I said last November, I still stand by it. Bitcoin has been one of the biggest beneficiaries of easy money policies. It still has a strong positive correlation with the SPX at .61.
I'm not picking on Tom to be a prick, we've all been wrong. But take accountability and own up to it. After all, Tom said Citi had the same brand value as Coke in 2007.
Price has broken a critical level with another $700 to go before the probability to fall between $2-3000.
Before the $25,000 2018 target was implemented, Lee was on Money Insider a little more than a year ago. His primary thesis was Metcalfe's Law as bitcoin was undergoing its mania phase. This law, originally used in telecommunications, states that a network is proportional to the square number of its users. That didn't pan out so well because as prices throughout the crypto-currency space cratered, it was revealed that transactions using bitcoin equally cratered.
So, if we were to apply Metcalfe's Law that would seem reasonable. Interest just caved. It was less appealing than ramen.
But wait... you get lots of airtime on CNBC if you like bitcoin. Tom needed something new to promote higher bitcoin prices: a magical multiple.
Tom now uses a 2.5x multiple on mining costs. There is no magical multiple.
Does bitcoin have utility? Some. To what degree is still up in the air. As I said last November, I still stand by it. Bitcoin has been one of the biggest beneficiaries of easy money policies. It still has a strong positive correlation with the SPX at .61.
I'm not picking on Tom to be a prick, we've all been wrong. But take accountability and own up to it. After all, Tom said Citi had the same brand value as Coke in 2007.
Price has broken a critical level with another $700 to go before the probability to fall between $2-3000.
Comment:
Boom boom
