Permabull Tom Lee sets the record straight and explains that he is standing firm on his previous Bitcoin price prediction.
Tom Lee, head of research and a managing partner at Fundstrat Global Advisors, sat with CNBC’s Fast Money to discuss the way Bitcoin will go in the second half of 2018.
Firm on His Feet
Being one of the most outspoken strategists on Wall Street, if not the only one, Bitcoin’s permabull Tom Lee came up with a $25,000 target for the first and foremost cryptocurrency’s price by the end of 2018.
However, on Thursday, he illustrated a sentiment which could have been rather discouraging for those believing in Bitcoin’s bright future. He said:
Bitcoin has historically traded at 2.5 times its mining costs. It’s not out of the question that it could be over $20,000 by the end of the year at fair value.
Regardless, Lee was quick on his feet, telling Fast Money that he “may have misspoke a little bit”. He also noted:
What I was trying to illustrate was that given where mining costs will be and applying the historical average of 2.5 times mining costs, that would 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.
Growing Mining Costs Being the Major Reason
In supporting his prediction, Lee cites the rising cost of bitcoin mining as well as the growing difficulty. He 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.
Nevertheless, he also noted that investors should be far less quibbling over a matter of a few thousand dollars as a year-end price of more than $20,000 would grant over a 200 percent increase compared to where we currently stand.
While Lee remains seemingly bullish, it’s important to note that he was, in fact, wrong last time he made a Bitcoin price prediction of a bull run following May’s Consensus conference. After the latter failed to take place, he explained that the falling price of Bitcoin is attributed to the expiration of futures contracts.
What do you think of Lee’s position? Do you think he’s as bullish as usual? Don’t hesitate to let us know in the comments below!
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