Fundstrat’s Thomas Lee appeared on CNBC Futures Now to make a bullish statement about the price of Bitcoin. He stood his ground on his previous prediction that Bitcoin would hit $25000 soon.
After Bitcoin crashed yesterday to below $8000, the outcome looked bleak for BTC HODLers. It is currently trading at around $7500, undoing the profits it made this year for a new low in 2018. Lee believes that the drop is due to “typical crypto volatility”, identifying three factors that will make his prediction come true.
While he did say that the charts are “pretty scary for folks”, he mentioned that the “notion of blockchain as a way to solve trust in the digital world has gained a lot of traction”.
The first of Tom Lee’s three factors is the cost of producing Bitcoin. He believes that it is trading at cost, with the cost of making Bitcoin being around $8000, unlike gold, which is being traded at double its extraction cost.
Lee also mentioned that he would keep an eye on institutional investors, believing that they would be one of the big catalysts in the crypto space.
“I think institutional investors have gained a lot of interest, and they haven’t really come into crypto yet because there is still some regulatory uncertainty, but that sort of ultimate allocation into crypto as an asset class is going to be a powerful reason why bitcoin rallies.”
Cryptocurrencies are still waiting on regulators to develop new frameworks to accommodate digital assets in the real world. Lee believes that a declaration for the side of cryptos would push Bitcoin into a rally.
He also went on to say that only 10 days comprise all the performance in one year of Bitcoin’s price. Without those 10 days, Bitcoin is only down by 25% in a year. He also said:
“So as miserable as it feels holding bitcoin at $8,000, the move from $8,000 to $25,000 will happen in a handful of days,”
Bitcoin is currently trading around the $7500 mark, after suffering a flash drop from $7918 to $7520. Twitterati commented, with user Yogesh saying:
“Is CME futures expiry got to do something with this fall?”
“Did it brake the lower trend or we are still in the hope situation?”
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