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Wall Street’s biggest bitcoin bull unveils “Bitcoin Misery Index”

Buy when the bulls are miserable, sell when they’re satisfied

Thomas J. Lee

Bitcoin bull Thomas J. Lee (via Fundstrat)

The “bitcoin misery index” is the newest stat for crypto traders to agonize over.

This financial metric was designed by Fundstrat Global Advisors co-founder and famous bitcoin megabull Thomas Lee. It claims to predict when to buy or sell bitcoin by ascribing a number to how “miserable” it is to own bitcoin at any given moment. The index does this by measuring the 90-day consistency of bitcoin’s price and a few other variables, then spitting out a misery number between 0 and 100. The guideline is to buy when the index is below 27 (investors are trending miserable) and to sell when the index is above 67 (investors are trending happy).

With an acronym that echoes the “body mass index” of physical well-being, the bitcoin misery index was introduced to help speculators identify the best times to make their trades. Where a medical doctor measures BMI to get an overall snapshot of your health, Lee’s BMI ostensibly determines the healthiest times to buy and sell bitcoin. So far, it is consistent enough to signal “buy” in times of market decline, and to signal “sell” when the market is up.

“The last four times this [index] was below 27 [there] was not a single instance with bitcoin not up 12 months later,” Lee told CNBC. Here’s what that data looks like:

Bitcoin misery index

Bitcoin misery index (“BMI”), according to Thomas J. Lee of Fundstrat, is obviously bullish because Tom Lee (via CNBC/Fundstrat).

The latest readings of this BMI place bitcoin sentiment at 18.8, its lowest and “most miserable” rating since 2011. Lee, a perennial bitcoin bull, interprets this as positive news. He holds midyear price targets for bitcoin at $20,000 and a year-end target of $25,000.

Echoing Warren Buffett’s “be greedy when others are fearful” dictum, the index’s suggestion of late is a strong one: buy crypto. Then again, that ought to be expected from an index started by Tom Lee.

Dylan Love is an editorial consultant, contributing reporter, and fiendishly curious technology enthusiast. He owns no cryptocurrencies.