Fundstrat Co-Founder Tom Lee hopes that the price of Bitcoin will rise along the same trajectory as the shares of technology companies from Silicon Valley.
In a conversation with CNBC on November 15, Lee said that cryptocurrencies are assets whose value is formed due to the network effect. He commented on his company's forecast that the Bitcoin price should rise to $25,000 by 2022.
Lee noted that this forecast was given back in 2017 as part of a five-year investment plan, adding that it can still come true, and quite easily.
"Cryptocurrencies are assets with network value. The more people hold them, the higher their price. In fact, this is a logarithmic function - if we double the number of holders, the price will increase fourfold. To rise to $25,000, the price will have to increase slightly less than four times. Thus, the number of Bitcoin holders should double," Lee said.
Fundstrat estimates that Bitcoin is held and used by about half a million people. Lee has also drawn a parallel with the behaviour of FAANG shares (Facebook, Amazon, Apple, Netflix and Google) since their public listing.
"Seventy percent of their profitability is due to the growth of the global Internet at that point in time. In other words, it is a logarithmic function of Internet growth. Cryptocurrencies also work," he added.
Lee recalled that he holds bullish views on the long-term prospects of Bitcoin, which as a "digital asset is still at the beginning of its journey" and will be in demand by institutional investors over time.
In October, Lee said Bitcoin should consolidate after a jump in the first half of the year.
Meanwhile, the leading cryptocurrency reached a three-week low of about $8,600.