It’s easy to find bullish price forecasts for bitcoin and other cryptocurrencies these days, but Fundstrat’s Tom Lee might have the most optimistic outlook yet.
MarketWatch notes that Lee sees room for a massive 21-fold increase in the price of BTC as it continues to supplant gold as a currency and market hedge:
“One of the drivers is crypto-currencies are cannibalizing demand for gold,” Lee wrote in a report. “Based on our model, we estimate that bitcoin’s value per unit could be $20,000 to $55,000 by 2022 — hence, investors need to identify strategies to leverage this potential rise in crypto-currencies.”
That’s a major jump from the $2,530 level that bitcoin fetched recently. Of course, this would be on top of what’s already been an impressive stretch, with the price more than doubling since the start of the year.
While gold supplies aren’t exactly growing at a torrid pace, bitcoin’s supply is growing much slower, notes Lee. He sees scarcity as a big bullish factor, along with potential central bank demand for cryptocurrency, if its market cap eclipses $500 billion.
“This is a game changer, enhancing the legitimacy of the currency and likely accelerating the substitution for gold,” writes Lee about central bank demand. Central banks like the Federal Reserve have been buying up gold for decades in order to bolster backing for their currencies, despite a lack of a gold standard. They could thus look to do the same using BTC.
The problem, of course, is that bitcoin is still relatively difficult for the everyday investor to tap. That could change soon, with multiple bitcoin ETFs — the most prominent of which being the Winklevoss Bitcoin Trust ETF (NASDAQ:COIN) — currently under consideration by regulators.