2018-7-7 14:00 |
Still in a prevailing bear market, cryptocurrency volatility has investors wondering whether a trend reversal is imminent. Co-founder at Fundstrat Global Advisors, Tom Lee confirmed his Bitcoin price prediction of $25,000 by end-of-year on July 5, 2018.
Tom Lee: ‘Bitcoin Trades at Twice Its Mining Cost’Bitcoin bull and former and former Chief Equity Strategist at J.P. Morgan, Lee appeared on CNBC’s Fast Money to reassure Wall Street of his $25,000 Bitcoin price forecast.
Lee told “Squawk Box” that Bitcoin has followed a trend of trading at around twice its mining cost – spelling positive price increases with rising difficulty:
“Bitcoin has historically traded at 2.5 times its mining costs. The reason bitcoin looks really good here is the cost of mining around $7,000 fully loaded. And the difficulty is rising. So by the end of the year, it’s going to be $9,000.”
With mining difficulty expected to rise as Bitcoin gets closer to its finite supply of 21 million, Lee estimates that the leading cryptocurrency’s value will follow and exceed the $20,000 mark by end-of-year.
“[Mining costs] imply fair value over $20,000, roughly $22,000. We still think bitcoin can reach $25,000 by the end of the year or something like that.”
With prices climbing back towards December highs near $20,000, Bitcoin still has a long way to go before trending in a bullish manner. The world’s largest cryptocurrency by market cap is currently trading 30% down from its 3-month highs at $9,800 in May.
Still A Long Way to Go for Crypto Mass AdoptionDespite a positive price forecast, Lee remains grounded in his outlook for cryptocurrency adoption on a large-scale.
As former Chief Equity Strategist at J.P. Morgan from 2007-2014, Lee predicts that the growth of blockchain integration will follow a similar track to that of mobile and internet convergence, which took about two decades before becoming prolific.
“I did wireless [research] in the 1990s. I saw 20 years of mobile and internet convergence. To me, this is not that different
Lee told CNBC that blockchain is a “multidecade story” still in its “early stages” of development. Whether his price prediction will prove true is yet to be seen. Traders are reminded to remain cautious during market drops and invest only what they can afford.
The post Tom Lee: ‘Bitcoin Can Reach $25,000 by End of Year’ appeared first on CryptoSlate.
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