Our
favorite permabull might be admitting defeat. Tom Lee was interviewed and it appears that he already has silently surrendered and ready to remove himself from his own bullishness on bitcoin.
I reckon this might be because his speculations about institutional investors
to buy bitcoin by this time of the year did not come to fruition.
In this week's episode of The Scoop, Tom Lee, Managing Partner and Head of Research at Fundstrat Global Advisor, tells The Block about the barriers preventing institutions from investing in bitcoin.
"There's a mechanical issue for crypto in terms of infrastructure thats needed but theres probably also a size of market issue," Lee tells The Block.
Lee said he believes the cryptocurrency space is "too small for the institutional world." Lee goes on to compare bitcoin's relatively small market size to that of gold, stocks, and bonds. "Gold is 9 trillion. The stock market is 66 trillion the bond market is 86 trillion, bitcoin is not even half a percent of the total assets," Lee says, adding that "if youre asking someone to allocate 1% to bitcoin thats like triple the market weighting, like youre youre asking someone to make a massive bet even though its 1% of their assets because bitcoin is that small."
"Its probably correct I think about 1% of the U.S. owns bitcoin and at that size its too small for an institution, its a hobby," Lee concludes.
Another barrier preventing institutional investors from entering the cryptocurrency space is a lack of infrastructure, Lee says. However, Lee believes this is due to the lack of regulatory protection. "Theres not enough legal and regulatory protection for bitcoin in the U.S. to prevent a White House executive order banning bitcoin, like nothing today would prevent bitcoin from being outlawed in the U.S."
Due to regulatory uncertainty, Lee believes institutional investors will feel they are taking on "reputational risk" for "extending it to a market that has no regulatory protection..."Source https://www.theblockcrypto.com/linked/42086/tom-lee-on-the-main-hurdles-preventing-institutional-investors-from-getting-into-bitcoin