Tom Lee, the Managing Partner and Head of Research at Fundstrat Global Advisors, has been notorious for his bullish predictions on Bitcoin. He has now stated that he believes that Bitcoin will reach and potentially exceed a price of $20,000 in 2018.
These statements came in a recent interview with CNBC, in which Lee argued that Bitcoin does not appear to be correlated with traditional assets such as gold nor with the general financial markets.
However, Lee stated that Bitcoin does seem to be linked to the mid-term price movements of emerging markets. Moreover, Lee mentioned ETFs geared towards the emerging markets, specifically naming the ”iShares MSCI Emerging Markets Index ETF.”
Such funds allow investors to invest in a heterogeneous portfolio of various stocks and assets in emerging regions and developing markets.
Nonetheless, Lee argued that both Bitcoin and emerging market ETFs ”essentially peaked early this year” and have since then been caught in a generally ”downward trend.”
”Until emerging markets begin to turn, I think in some ways that correlation is going to hold and tell us that sort of the risk on mentality is those buyers aren’t buying Bitcoin,” Lee added.
Although he indicated that the current market sentiment for Bitcoin leaves certain aspects to be desired, Lee noted that a strong performance in emerging market ETFs could lead to a drastic increase in Bitcoin.
He remarked that the current heated situation between the US and a number of states – Iran, China, Turkey, and others – could entail a loss of value for the US dollar. Lee stated that a weakened dollar could very well translate into an increase in the price of Bitcoin.
Lee noted that he expects the end of this year to mirror that of 2017 when Bitcoin surged dramatically in price. Lee went on to predict that this rally will mean that the price of Bitcoin will surpass $20,000 by the end of this year.
This would be a substantial increase in the price of Bitcoin. At the time of writing, Bitcoin sits at $7,239 after nearly a month of steady price increases. A Bitcoin price of $20,000 would, therefore, represent 276% of the current market price.
Nevertheless, an increase of 176% in a few months would not be unprecedented for the cryptocurrency, which has shown its ability to rally substantially before.
According to Lee, his prediction hinges on whether emerging markets indeed recover by the year’s end. Moreover, if this happens and the US dollar becomes increasingly devalued, Lee expects the price of Bitcoin to rise explosively before December.
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Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the cryptocurrency industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.