Thomas Lee | Fundstrat Global Advistors
Bitcoin $25,000 and the impact millennials will have on digital assets
Thomas Lee is the Co-Founder and Managing Partner at Fundstrat Global Advisors; widely recognized as the only institutional research firm providing comprehensive market analysis and price analytics for cryptocurrencies and blockchain technology. We recently spoke with Thomas, who will be one of our keynote speakers at our Digital Asset Strategies Summit (Oct. 16 – 17 – Dallas), as he shared with us his thoughts about institutional use of cryptocurrencies, Bitcoin reaching $25,000 and the impact millennials will have on digital assets.
Digital Asset Strategies Summit: Can you discuss how Nomura’s newly announced venture, Komainu, could impact institutional investment in digital assets?
Thomas Lee: The institutional crypto custody joint venture between Nomura and Ledger, Komainu, is an important step to create the necessary array of infrastructure solution necessary for institutional investors to enter the crypto market broadly. There have not been a lot of incremental announcements since May of this year, but both entities have very good reputations.
Digital Asset Strategies Summit: You made a prediction earlier this year that Bitcoin would reach $25,000 by the end of 2018. Do you still stand by that prediction? If so, what are the catalysts that will get Bitcoin to that price as well as what catalysts could prevent the $25,000 price target from happening?
Thomas Lee: We still think Bitcoin can reach $25,000 by year-end. YTD, Bitcoin and the crypto market have fallen, partly due to regulatory concerns but also due to the fact that many “onramps” from fiat to crypto were shut down this year—most US banks and many global banks restricted use of credit card platforms to buy crypto and this slowed inflows. Already confidence is improving. Moreover, it seems that payment processors are developing newer systems (ie, Mastercard filing). But of course, the most important is clarity regarding regulations. This seems to be happening.
Digital Asset Strategies Summit: How close is the industry to institutionally accepted custody solutions?
Thomas Lee: Today, if a traditional financial institution wanted to outsource custody, there are credible solutions and high-quality providers. However, multiple redundant and interoperable solutions do not exist. But we see this coming. We are seeing a substantial number of institutional grade solutions and technologies being developed and this bolsters our confidence that the necessary elements are coming together to support much broader institutional participation in crypto. The efforts are coming from existing exchanges, custody banks, new technologies and existing crypto custodians and wallets.
Digital Asset Strategies Summit: Can you discuss how digital assets will be impacted by Coinbase’s and Circle’s recent moves towards regulatory oversight?
Thomas Lee: It’s a good thing when infrastructure providers are willing to “run towards” regulation. Financial regulators generally prefer to work with SROs (self-regulatory organizations) and when exchanges run towards regulations, it means the industry is creating credible and working SROs.
Digital Asset Strategies Summit: Can you discuss how you believe that millennials will impact the growth of digital assets?
Thomas Lee: Millennials represent 2.5 billion adults globally, or 43% of all people over the age of 17. They are beginning to enter their prime income years and are meaningfully impacting all parts of the economy today. We estimate they will represent 57% of all incremental consumers in the next decade and 72% of purchases of financial products. First Data has estimated they will control $700 billion of financial assets by 2020. Today, less than 1% of that is even allocated to digital assets.
Digital Asset Strategies Summit: Thanks Thomas. We look forward to hearing more of your thoughts at the Digital Asset Strategies Summit October 16 – 17 in Dallas.