The value of Bitcoin may now be compared with that of gold as it’s likely to be heading $25,000 in five years according to Tom Lee, Head Research of Fundstrat Global Advisors and Former Managing Director of JP Morgan Chase
He said it in his recent interview with CNBC’s Fast Money program.
Although Bitcoin has suffered from recent negative news from countries like China such as banning of ICOs and planning to shut down the Bitcoin exchanges by the end of the month, Lee thinks there are still advantages to the situation.
According to Lee, there are two factors in the issue - liquidity effect and perspective of the people. According to him, Chinese exchanges operate with 30 percent of Bitcoin value. If they decide to shut down the digital currency, obviously there is gonna be force selling.
It's safe to point out that there have been seven times already that the crypto world has seen a setback of this magnitude.
The second factor is the perspective of the people on Bitcoin. Our society tends to see Bitcoin as a bubble and a fragile currency so everyone should be on the other side of that.
“Well for instance, you know number one Bitcoin is not what people think... We have some data, there's only 300,000 holders of at least $5,000 so think about that that's like saying the iPhone was a bubble in 2007 four days into the sale because there were 500,000 of iPhones. So it's not that many holders of Bitcoin you know when you think about how many wallets there are today that holds $5,000, it’s huge so I think it's still very early stages.”
Bitcoin is different from other technologies, so the actual network itself is generating the value so that the visa of Bitcoin is going to be as valuable as the Blockchain network itself.
According to Lee, fraud transaction cannot happen on this digital currency as it will cost $30 bln dollars to create on fake Bitcoin, so it's a very secure trusted network because of the nature of Blockchain.
“I think it can be very threatening to financial institutions to see that hey, trust is created on the network and on the distribution network by the way from generation perspective I think people under the age of 30 think that makes perfect sense.”
Bitcoin is still the best tech framework of today.
Just like gold, it is worth investing on. One cannot measure its value in the future with just one look but needs a total analysis on the market. Nevertheless, it still promises a positive, valuable outcome.
We still have a ways to go before users truly appreciate the value of their personal data and digital assets. But as they begin to understand the consequences of allowing centralized services to hoard their data and decide to reclaim control of what’s rightfully theirs, blockchain will be the technology they turn to.
Ben Dickson is a software engineer and the founder of TechTalks, a blog that explores the ways technology is solving and creating problems. He writes about technology, business and politics.