Tom Lee Turns Bearish

Is it just me or is this the most bearish Tom has ever been? Quote from his most recent interview:

"There's a mechanical issue for crypto in terms of infrastructure that’s needed but there’s 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 you’re asking someone to allocate 1% to bitcoin — that’s like triple the market weighting, like you’re you’re asking someone to make a massive bet even though it’s 1% of their assets because bitcoin is that small."

"It’s probably correct I think about 1% of the U.S. owns bitcoin and at that size it’s too small for an institution, it’s 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. "There’s 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..."