Zinger Key Points
- Entrepreneur and strategist Tom Lee suggested allocating 1% of a portfolio to Bitcoin when prices were at $5,000.
- In a recent interview, Lee pointed to two factors that were enough to describe the upcoming growth trajectory of Bitcoin.
- Get New Picks of the Market's Top Stocks
Investor and entrepreneur Tom Lee advised a 1% portfolio allocation to Bitcoin BTC/USD in 2019. Benzinga looks back at how this call aged and why Lee is now calling for a $100,000 price target for Bitcoin.
What Happened: When Bitcoin’s price was only $5,000 in 2019, Tom Lee advised a 1% portfolio allocation, saying the risk is manageable, considering the potential gains.
"Bitcoin makes all of its gains in 10 days a year, I think it is an example that you know if you screw the 10 best days Bitcoin loses 25% a year. So, you got to essentially hold it or huddle it…to really capture the gains,” Lee said.
Five years later, Lee pointed out in a recent interview on Facts vs Feelings, reported by media company TFTC, that this allocation would now make up around 40% of someone's portfolio due to Bitcoin’s significant price increase. His advice is still to invest 0.5% in Bitcoin and 0.5% in Ethereum ETH/USD.
Lee highlighted two key variables that explained 90% of Bitcoin’s price movement: Bitcoin wallets and activity providers. These factors led to a projection of Bitcoin reaching $25,000 by 2022, a 5x gain. While these variables hold good even now, Lee also added that predictions from Michael Saylor that Bitcoin could hit $13 million are still in play.
Also Read: Bitcoin Gearing Up For Next Bull Run? On-Chain Analysis Says It Just Might Be
Why It Matters: Bitcoin is currently below the psychological $60,000 mark after reaching an all-time high of $73,750 in March 2024. Lee's crypto team predicts BTC will reach $100,000 before year end, with most gains after election day which coincides with the Halving cycle projection. He believes this is "not crazy."
TV host Jim Cramer once said that anyone holding Bitcoin was foolish, and JPMorgan CEO Jamie Dimon threatened to fire anyone owning Bitcoin when its price was $4,000 in 2017.
What’s Next: The influence of Bitcoin as an institutional asset class is expected to be thoroughly explored at Benzinga’s upcoming Future of Digital Assets event on Nov. 19.
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© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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