It’s going to take more than a double-digit percentage drop in a week to shake strategist Tom Lee’s faith in the potential of bitcoin.
He said on the program Thursday that bitcoin should be viewed as a store of value like gold was in the 1980s when some investors didn’t trust dollars.
“It’s not worth it to look at bitcoin two months, two weeks ahead,” Lee argued, saying he still believes each bitcoin will be worth $25,000 in five years or about 600 percent higher than current levels.
In early trading on Friday, bitcoin fell below the $3,000 level before turning higher in volatile action. But the cryptocurrency was still about 15 percent lower for the entire week by midday.
In the past 12 months, bitcoin has spiked about 500 percent.
But China’s recent crackdown on bitcoin exchanges there has created some forced selling, Lee said. But he stressed investors in the digital currency aren’t strangers to these kinds of swings.
From mid-June to mid-July, bitcoin fell about 30 percent and then more than doubled to an all-time of over $4,900 at the beginning of September.
On Tuesday, at the CNBC-Institutional Investor Delivering Alpha conference, Dimon called the digital currency a “fraud” and predicted governments will step in. “Wait until someone gets hurt. Wait until it’s used for illicit purposes, which it’s somewhat used for illicit purposes. They close it down. That’s my point,” Dimon said.
Lee also said bitcoin can’t be in a “bubble,” another assertion of bitcoin doubters, because so few people actually own it. “I think it’s still very early stages.”
“We have some data. There’s only about 300,000 holders of at least $5,000 of bitcoin,” he said. “That’s like saying the iPhone was a bubble in 2007 four days into the sale because there were 500,000 iPhones sold.”
Noted economist Mohamed El-Erian on Wednesday told “Squawk Box” that bitcoin is certainly a “disruptive” technology but won’t see widespread use. “The current pricing assume massive adoption,” Allianz’s chief economic advisor and former Pimco chief said. That’s the reason why he thinks bitcoin should be worth about half today’s value.