Even though the market is coming down, Tom Lee stands by his end-of-year prediction of $15,000 for bitcoin (BTC).
Bitcoin year-end prediction
In a recent interview with CNBC, the major Wall Street cryptocurrency bull Tom Lee stands fast of his already reduced bitcoin prediction. Lee earlier predicted a price of $20,000 at the end of 2018 but reduced the target to $15,000.
Tom Lee is the head of research at Fundstrat Global Advisors. He explained that there are two types of players in the cryptocurrency market. The first type has wallets and is using cryptocurrencies for different types of transactions. The second type is in the game for speculative reasons and is looking to make money. The best way to not get “burned” in the crypto market is for the two sides to communicate with each other.
Even though Lee still thinks that bitcoin (BTC) can reach $15,000 by year-end, he thinks that the development that we are seeing is negative. The development signals a downturn in momentum. However, Lee is still positive about the fundamental aspects of bitcoin. He argues that we are still very early in the process.
“There are only 50 million bitcoin wallets and well over 5 billion VISA cards. The current adoption is, therefore, the runway of the future.”
What would spur bitcoin adoption?
Retail investors drove the last wave of adoption, and the next will need an institutional push according to Lee. Institutions are not necessarily getting hurt during this downturn in the market, even though bitcoin reached a price of $4,035. The recent bitcoin cash hard fork created uncertainty in the market which could have been a reason that sparked the sell-off.
Institutions will initiate the new wave of adoption. Lee says that regulation would need to come in place for that to happen and two triggers, in a not too distant future, might lower the barriers.
Firstly, Bakkt will launch in January; the date just got postponed. The platform will most likely attract institutional interest in the cryptocurrency market. Bakkt is operated by Intercontinental Exchange who is the owner of New York Stock Exchange among other exchanges.
The second reason is that institutions will get more involved in the market as the industry receives more regulatory clarity, which is partly underway now, Lee said, adding:
“Once we have regulatory clarity, institutions will feel more comfortable in making bets.”
However, another cryptocurrency bull, Mike Novogratz revised his bitcoin prediction. He stated that bitcoin would not break $9,000 this year. The reason for the current price pressure on bitcoin, according to Novogratz, stems from the fact that industry actors have been forced to sell significant amounts of cryptocurrencies to ”fund the burn rate of the industry”.
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