* Tom Lee had a lot to say about why the Bitcoin price had rose so high in 2017, and why it had fallen so low in 2018.
* Based on the price of Bitcoin mining costs of around US$6000, this stable price point lasted for much of Q3 this year. Once it dropped below this mining cost, it dropped rapidly as Bitcoin miners were no longer adding sales volume. Active crypto speculators had no counterparty to buy from or sell to in the same amounts.
* Based on this US$6000 price for Bitcoin, a 2.5 times future value, or US$15,000 price target for Bitcoin seems reasonable in his view for a future price rise recovery level.
* US regulators like the SEC have been low in support, but other parts of the US government like the DEA, have very high support for bitcoin. They are able to seize illegal profits from drug enforcement raids very easily when in crypto form. They can then resell them to the market helping the US treasury government coffers quickly.
* He gave a number of very solid explanations as to why the bottom price of Bitcoin was coming soon, but unclear with any short term price target. It could even reach US$1000 per Bitcoin short term, before a full recovery begins in 2019.
* The overall recovery is not in doubt, so the short term bottom price is only a minor concern for longer term investors. There is already scale with consumer transactions. he is less worried about any investor's entry price short term.
* His main view however, was that in a few year's time, the exact price bottom will be of no true value as the overall price of Bitcoin will rise and investors will ultimately benefit from this high growth Cryptocurrency asset. (Photo of Tom Lee & Mark Pink, President of TMJ Partners)
* As far as scale, Bitcoin has passed US$1.3BN in annual transaction volume, more than Paypal US$600M or Discover US$200M. Visa still dominates today with 8.9BN annually.
* One point about China, that I did not know, was about how you can legally mine Bitcoin in the country. Many government officials are doing so, and often diverting low cost or free electricity for these efforts. Staff needed to maintain the mines and distribution however, are expensive, even in China. Margins have certainly come down a lot in 2018.
* Another curious fact was that 14% of young men in Japan aged 25-30 owned cryptocurrency. This is a very high number of the Millennials.
* In Korea, 23% of 20 somethings bought cryptocurrencies. This compares to 19% for 30s, 12% for 40s, 8% for 50s but 10% for 60 somethings. This represents a large retail market for Bitcoin locally. The higher Bitcoin prices in Korea are known as the Kimchi premium.
* Lastly, the most interesting fact that I learned was about personal credit. "One of the best most accurate indicators of bad credit is freely available on a mobile phone. People who often let their mobile battery run out, and then need to scramble and recharge, are often the very same people who are a high credit risk. The two are very closely related". This was just one of many things I really enjoyed learning.
For more Buy-Side and Sell-Side roles in Asia-Pacific, contact our TMJ Partners Japan & Asia Finance team.
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