Don’t Believe The Bitcoin Bears, Says Fundstrat’s Tom Lee



miss Bitcoin is down nearly 50% this year the Bears are out in full force in their argument center around three key points Google search is dropping about 75 percent this year trading volumes also down and the price stuck below $10,000 but fun strats Tom Lee Wall Street's biggest Bitcoin goal says each of those points is wrong so let's do some point by point myth-busting Tom welcome to the show let's are off for the Google searches why do you think searches being down is irrelevant well sir Google searches aren't a leading indicator for Bitcoin I think it's actually a coincident indicator meaning as the prices fall and I think interest has dwindled but I don't view that as signaling bitcoins not going to recover by the end of the year okay trading volumes why don't they concern you well trading volumes are down huge from December they're down close to 80 percent but you have to remember December was the parabolic blow-off for Bitcoin and compared to just the second half of last year Bitcoin volumes are up 40% and compared to a year ago the same time January to June Bitcoin volumes are 900 percent so I I think that volumes have actually been pretty healthy and then let's get to the price why can't Bitcoin break through 10k well it's uh you know Bitcoin has a really some technical issues right it's it's kind of a busted chart and I think there's was some uncertainty of a regulatory overhang but you have to keep mine Bitcoin makes all of its performance in ten days and any years so I don't think the fact that it's at the current levels is going to prevent it from actually rising before the end of the year hey Tom how about just the idea that it's not just Bitcoin that it's all I mean they're all trading together I don't think I mean you really see a Bitcoin underperforming and therefore is this really a gloss off the entire space well I mean I would say actually the price action is different I'm sorry to cut you off yeah maybe I didn't ask the question is the price action different for Bitcoin than it is for the other major all's well Bitcoin is and the other tokens are all gonna be highly correlated but if I would say if you want to measure a real underlying demand you know this year I SEOs have raised close to 10 billion a year to date that's double the entire CEO race last year so I mean there's still a lot of activity and I think institutions still a lot of interest but at the moment I think it's kind of you know it we're in purgatory with regard to regulatory clarity and I think that's going to keep it's named a crypto czar yes I mean in terms of the overhang what makes you so confident that this 10-day stat is actually going to hold true this year a year in which I SEOs are being cracked down on the SEC has appointed a regulatory czar here I mean things seem to be coming to a four on the regulation front that's right so this is an important year and that's I think if I was an institution and I was going to make an allocation into crypto I'd probably want some clarity so I think those are certainly keeping new Fiat dollars from coming into crypto but crypto and blockchain and Bitcoin I don't think Bitcoin has risk of being a you know regulated out of existence because number one it's doing fine outside the US and as you know China even said blockchain is central there's a long way between 7,500 and being regulated out of existence for people to lose money on well yes but Bitcoin still works great today it's a great store value it's it's I think it works really well in terms of you know digital transactions and I think it's a great example of security I mean in in ten years not a single person has entered a fraudulent entry on the blockchain you know that's trillions of dollars of on chain transactions none of them have proven to be fraudulent so let me ask you read your notes you had a six thousand dollar all-in cost to mine Bitcoin yeah that comes from our data scientist Sam doctor would that create a floor we rounded if you want to think of a floor as the price of Bitcoin versus the cost of mining in from the Bitcoin bare market at December 2013 to January 2015 Bitcoin bottomed at its mining cost so price-to-book went to 1.0 today that mining cost of 6,000 means that should act as the floor for bitcoins price now except that with each additional Bitcoin mined the mining costs goes up Oh time goes on the mining yeah what happens is yeah there's having and then there's difficulty so there's a couple of factors driving a cost-plus you know if you get more efficient a six that's gonna reduce the money cost okay Tom good to see you thank you very a fun strat so here's the thing if you're a long-term believer in this whole thought of digital assets and you buy into his store value argument and then you're gonna buy into things like censorship resistance you're gonna buy into this immutable ledger and nothing that's happened in the last seven months is gonna change that thesis nothing at all if anything it may embolden you a little bit to see the sort of fluctuations that we had at the end of last year the crash that we've had this year and the continued investment in the projects to upgrade the network but also invest in these projects like these I SEOs which are now getting to the point of ten billion on the year but but I could push back and say that I don't think anyone disputes blockchain technology and why it makes a lot of sense for a lot of businesses a lot of sectors to go after it but what you're seeing is is once the SEC and a lot of players come in and get and take out a lot of these these fraudulent icos etc I mean what we're learning is that a lot of this was respected of friends right I'm a believer but to say that a lot of these currencies were just people getting in there to trade something that was opaque and had an enormous amount of bottom hey that was my big belief last fall that it was legal gambling on your iPhone no doubt about it but it hasn't stopped the investment we're seeing in the VC community and the FinTech community that sort of thing so to me I think at 7,500 up from a thousand in January of 2017 I think we're just still doing okay on the thesis you hey there thanks for checking out CNBC on YouTube be sure to subscribe to stay up-to-date on all of the day's biggest stories you can also click on any of the videos around me to watch the latest from CNBC thanks for watching

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