Wall Street expert and co-founder of the Fundstrat Global Advisors Tom Lee, is in the news again with his price predictions for Bitcoin (BTC) before the end of 2018.
Lee who is the only wall street strategist who issues Bitcoin price target made his predictions for Bitcoin on CNBC.
Tom Lee’s Predictions
Featuring on CNBC’s “Squawk Box” on Thursday morning, Tom Lee gave his price target for Bitcoin for 2018, despite the bearish trend plaguing the crypto market.
According to Lee’s first prediction made on CNBC, the world’s largest cryptocurrency could well trade above $20,000 before the end of 2018.
The Bitcoin bull is famous for his strong price predictions for Bitcoin (BTC). Bitcoin followers would remember that back in January when the market was predominantly bullish, Tom Lee predicted that Bitcoin would hit $25,000 before the end of the year, and would be valued somewhere around $91,000 by 2020.
Back when his first predictions were made, the market was in full bloom, and Bitcoin was valued somewhere around $15,000.
However, 6 months after Bitcoin is less than 50% of its value in January, Tom Lee maintains his stand than Bitcoin would still trade above $20 before the fall of 2018.
Tom Lee’s Backing for Bitcoin (BTC) Price Prediction
Wall Street strategist Tom Lee, based his prediction of Bitcoin on the correlation that seems to exist between the price of Bitcoin (BTC) and cost of mining Bitcoin.
The cost of Mining Bitcoin is currently somewhere around $7,000 USD, and it is expected to rise before the end of the year.
According to Tom Lee, Bitcoin historically trades at 2 to 2 and a half times its mining cost. The wall street expert said;
“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”
Miners of cryptocurrency make use of high power computers that use a lot of electricity to complete a series of complex calculations in order to create a Bitcoin (BTC) hashing.
The expense of this process is expected to rise, with more powerful computers looking to grace the market before the end of the year.
Tom Lee Lowers His Prediction
Later reappearing on CNBC on Thursday afternoon, Tom Lee quickly clarified his statement made in the morning of the same day, to which he commented that reactions have been greatly over exaggerated. Tom Lee reaffirmed his predictions by saying:
“I do think it’s the first time I’ve heard someone thinking something could triple is a bearish comment. I think I may have misspoken a little bit… what I was trying to illustrate was that applying the historical average of 2 and a half times mining costs would imply for a value of over $20,000 – roughly $22,000”
The latter prediction made by Tom Lee seems to be 20% less than his initial prediction. However, the wall street expert has maintained his stand that Bitcoin investors should not quibble over a few thousand dollars, and maintains his stand that Bitcoin (BTC) still has the potentials to surpass $20k and perhaps reach a value of $25k before the end of 2018.
Price Status of Bitcoin
Despite the rather general bearish trend of today, Bitcoin packs enough momentum to force a bull run. As at the time of this writing, Bitcoin (BTC) is up by 1.24% which gives the asset a value of $6,674.16. Bitcoin maintains its position as the largest cryptocurrency, with an estimated market capitalization of $114.36 billion.
Tom Lee is one of the most respected Wall Street experts in the industry. Some of Lee’s past predictions have proven to be true, like his famous prediction of the price of Bitcoin (BTC) being affected by the tax selling pressure in the first quarter of the year. However, not all of his predictions have come true
If Bitcoin (BTC) is going to meet the predictions of Wall Street strategist, Tom Lee, the asset would need to grow by about 250% in the next five months. If there’s one we have learned from the crypto market, it is that the market is highly volatile.
While it may seem farfetched for BTC to hit that value, the volatile nature of the market opens up that possibility, and we have seen cryptos do it in the past.