The bitcoin bears may be in control at the moment, but that is not leading one cryptocurrency market strategist to recoil. Fundstrat Global co-founder Thomas Lee is standing firm on his outlook for the bitcoin price to reach USD 25,000 by year-end despite the fact that the leading cryptocurrency has just revisited April lows and slumped to the USD 7,500 threshold.
The market drop is serving as an indication that “bitcoin is underappreciated”, Lee said on CNBC, adding that’s why Fundstrat likes it at USD 8,000. He reiterated his top-10 day theory, in which historically all of bitcoin’s annual gains are achieved on the best 10 trading days of the year. Lee reminds investors that “bitcoin doesn’t have to go up in a diagonal line.”
Even though the broader cryptocurrency market didn’t rally during the Consensus summit last week, it was a clear demonstration of the strong interest in the blockchain, as evidenced by the thousands of people who showed up, which Lee notes is anecdotal evidence that the market is resonating.
“The notion of blockchain as a way to solve trust in the digital world has gained a lot of traction, especially out of consensus. And what invsetors aren’t conectinng is that you can’t necessarily just say ‘I believe in the blockchain.’ Bitcoin and cryptocurrencies are essential to how blockchains operate in the security,” said Lee on CNBC.
Meanwhile, reports suggest there is a talent shortage of blockchain developers given the robust demand stemming not only from startups but also global corporations looking to integrate the public ledger. For example, Google, which recently extended a job offer to Ethereum’s Vitalik Buterin.
Lee acknowledges that bitcoin could be a “scary trade” for investors, given that it has shed more than half its value from its December 2017 highs and that holding at USD 8,000 — which is at-cost for bitcoin mining — could feel “miserable.” What investors should remember, however, is that the market rally is contingent on a couple of milestones being reached in the market, including institutional capital coming off the sidelines and regulation taking shape.
“Institutional investors have gained a lot of interest and they haven’t really come into crypto yet because there’s still some regulatory uncertainty. But that ultimate allocation into crypto as an asset class is going to be a powerful reason why bitcoin rallies,” said Lee.
Fundstrat’s Lee was forced to eat some crow when a bitcoin rally he predicted for Consensus 2018 didn’t materialize, but he acknowledged that his prediction was “too optimistic.”