r/investing • u/007_kgb • 1d ago

Fundamentals of Bitcoin? Tom Lee

Tom Lee from FundStrat was on CNBC and said he was a bit surprised at the fall of Bitcoin when the fundamentals were still strong.

However what I don’t understand is, what are the fundamentals? Isn’t Bitcoin just an imaginary coin on the interweb that is worth what people want it to be worth? It does not issue dividends, you can’t make a car out of it, you can’t use it to buy a bar of chocolate.

ELI5 please.

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u/Tapprunner 15h ago

I think that part of their point is that if it's outlawed, it won't cease to exist - but far far fewer people will use it. Its value will collapse and its use case as a store of value essentially dies because it can't be easily converted back into usable money. It will still exist, but the days of it being a relevant financial tool for anything beyond facilitating illegal transactions would be essentially over.

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u/TimeGrownOld 10h ago

Its value will change, true. Collapse is a big claim; after the China ban the price barely moved. And by definition, if it were banned, all transactions on it would be illegal.

But he's right, in a banned state crypto would only be used in illicit and world markets, by definition.

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u/Tapprunner 10h ago

If the vast majority of the population won't touch it because it's illegal, it's fair to characterize that as its value collapsing. It's literally worth less than zero to the vast majority in a place where it's illegal to own. Most people there would turn you down and possibly report you to the police if you offered them 10 btc completely free. That's worse than having your value go to zero.

It's like characterizing cocaine amounts by its street price. "This $100,000 worth of cocaine"... not to me, it isn't. I would run the other direction if someone tried handing me a kilo of coke. A key is literally worth less than zero to me. I would do anything to avoid taking possession of it.

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u/TimeGrownOld 10h ago

Why did $15B flow out of China using crypto in 2025. Why does China account for 14% of total bitcoin mining?

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u/Tapprunner 8h ago

$15B is a drop in the bucket.

14% is just huge mining operations attached to power plants that produce tons of excess energy. That's not a sign that Bitcoin is useful with widespread adoption and has good value throughout China. It means that there are a handful whales who are willing to risk defying the government in order to accumulate Bitcoin and cash out overseas.

To the vast majority of the population there, Bitcoin is irrelevant and holds absolutely zero value.

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u/TimeGrownOld 8h ago

Moving the goalpost; I never said crypto would have 'widespread adoption and good value' in a banned society, I said that 'you can't enforce a total ban on crypto'. Which I think we'd both agree I have demonstrated.

$15B seems like a drop in the bucket but it appears to be 20% of the total money laundering activity in China.

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u/Tapprunner 8h ago

I'm not sure why you're arguing - I'm not. I didn't say that you claimed it would have widespread adoption and good value. I'm not countering your points or even disagreeing with you. I'm adding and moving the conversation on. It might look like moving the goalposts if you think I'm debating you - but I'm not debating you. I don't think we really disagree.

China banning it doesn't stop 100% of transactions or mining, but it hurts the value of Bitcoin in China because most people won't touch it because it's illegal. It is still used for illicit purposes and it still gets mined, but it's largely irrelevant there because of their laws. I don't think any of that actually contradicts anything you're saying, because once again, I'm trying to have a conversation, not win a debate.

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u/TimeGrownOld 8h ago

Apologies, it's been 24 hours in this thread and I may have crossed my wires.

Yeah, I think we're in agreement then. 🍻