Tom Lee from Fundstrat made a bold prediction regarding Bitcoin's price, stating that it could potentially reach $2.5 million. In his appearance on CNBC, he explained the reasoning behind his forecast and highlighted the current market conditions.
Forecast Analysis
On CNBC, Tom Lee expressed that Bitcoin's minimum value should at least compare to the market value of gold. According to Lee, Bitcoin could be worth between $2 million and $3 million and even higher in the long run.
Global Liquidity and Bitcoin Impact
Lee noted that Bitcoin is responding to global liquidity, which is currently on the rise. The federal funds rate is set at 4.25%-4.50% and, as reported, remained unchanged after the latest FOMC meeting. However, Lee believes that investors expect the U.S. Federal Reserve to adopt a more dovish stance, with two rate cuts anticipated this year.
Supply and Demand Dynamics of Bitcoin
Lee also pointed out research from Bitwise indicating that 95% of all existing Bitcoins have already been mined, but only about 5% of the global population has any exposure to the leading cryptocurrency. He suggests that there is a significant demand versus supply imbalance, meaning there are many potential Bitcoin buyers in the next decade.
Tom Lee's predictions highlight the importance of global liquidity and the demand-supply relationship in the cryptocurrency economy. His beliefs about Bitcoin's future could significantly impact the market in the coming years.
