- Tom Lee expects capital to flow from equities into crypto in the next decade.
- The executive says the biggest threat to crypto would be an exposed weakness in Bitcoin.
- He believes regulatory clarity will speed up the growth of Bitcoin’s value.
In a CNBC interview, the co-founder of Fundstrat Global Advisors, Tom Lee, gave his outlook on crypto and Bitcoin. The pundit explained possible pitfalls and positive news that Bitcoin could face as he expects the asset to eventually reach the $200,000 price point.
The Biggest Threat To Crypto Would Be A Vulnerability Exposed In Bitcoin
In an interview with CNBC on their new five-day-a-week show called CNBC Crypto World, hosted by MacKenzie Sigalos and Kate Rooney, Tom Lee gave his views on the crypto market and Bitcoin. Tom Lee revealed that he expects the crypto market to experience an influx of capital in the next decade as funds are removed from the bond market.
Tom Lee revealed that with plans by the Fed to raise rates after a 3-decade long decline, investors are bound to lose money in bonds in the next decade. He expects investors to move about $60 trillion from bonds to things like the stock market to generate yield. However, he says, “I think what’s more likely is that a lot of speculative capital from equities flows into crypto.”
Tom Lee believes that the biggest risk to crypto would “be a vulnerability exposed in Bitcoin.” He said that Bitcoin remained the most important crypto network as it had the largest market cap.
The Fundstrat Managing Partner noted two possible scenarios that could be catastrophic for the asset class. Firstly, “If the cost of energy globally fell to zero, because if you don’t have to spend money to protect a security network, it means someone can launch a 51% attack.” Secondly, a situation where someone figures out a way to “defeat the proof of work concept itself.”
Lee disclosed that the growth of Bitcoin could face an immense increase if they could see “the existing generation of investors in the US to be willing to allocate to Bitcoin.” He noted that about “76% of the wealth in America is controlled by people over 65, about $100 trillion.” In Tom Lee’s opinion, most of these people are yet to take the asset seriously and are discouraged by the lack of regulatory clarity, adding that even a small percentage of this capital coming into crypto could have huge implications.
Dashed Hopes And Continued Regulatory Ambiguity
It is not the first time that pundits are predicting a six-figure price valuation for the foremost cryptocurrency. In September of 2021, Standard Chartered, in a report, said they expected Bitcoin to “peak around $100,000 in late 2021 or early 2022.”
However, these predictions have not come through. In recent weeks, the price of Bitcoin has remained around the $40k price level, even dropping below $38k on Saturday.
At the moment, regulatory ambiguity in the US persists as the crypto community waits patiently for the executive order on crypto from the Biden administration, expected within this month. Several institutions, despite crypto interest, remain on the sidelines because of regulatory fears and a desire to remain compliant.