Tom Lee says speculative activity in crypto markets is not high enough

Bitcoin remains hypervolatile, but its turnover lags behind that of other assets, which does not allow speaking of the high ‘speculativeness’ of the first cryptocurrency. This was stated by Tom Lee, co-founder of the analytics firm Fundstrat, according to Financial News.

The top executive reacted to the thesis that many investors are not rushing to add digital assets. Skeptics point to regulatory uncertainty and a high degree of market speculation, even as they show significant interest, he added.

Despite the industry’s label of the ‘Wild West’, the volatility of the MVIS CryptoCompare Digital Assets 100 Index, which tracks the top-100 largest crypto assets, does not exceed that of any other index by more than twofold.

According to Li’s calculations, Bitcoin’s turnover is 2:1, while the US dollar’s is 96:1, and a barrel of oil’s is 31:1.

For the Fundstrat co-founder, Bitcoin is akin to gold in the early days of its exchange trading. The precious metal also experienced strong price swings in the 1970s until, five to six years later, its market capitalisation reached $10 trillion.

“Today, with the penetration level so low, one can expect Bitcoin to be hypervolatile. But as nine out of ten households invest in the first cryptocurrency, its price fluctuations will ease,” the specialist explained.

Earlier, Li stated expectations of a ‘huge’ inflow of speculative capital into crypto.

FSInsight, the firm he founded, forecasted the first cryptocurrency reaching the $200,000 mark in the second half of 2022.

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