Fundstrat co-founder and strategist, Tom Lee, adheres to his forecast that the price of Bitcoin (BTC) will reach $ 25,000 this year. Lee outlines three key factors that convince him that the price of cryptocurrency will exceed the highs of 2017.
Recall, on Thursday Bitcoin fell below $ 8,000 and traded around $ 7,300, losing much of the growth achieved from mid-April to early May. Taking into account this fall, the Bitcoin rate has decreased by 41% since the beginning of the year. However, according to Lee, the price drop is due to the "inherent volatility of the cryptocurrency". He explains his optimistic mood with three main factors:
The first factor is the cost of producing and replicating Bitcoin. According to Lee, Bitcoin is "traded at cost", since the price of its production is almost equal to the trading price. Since the average cost of producing 1 BTC is about $ 6,000, it still costs more than the cost of mining.
The main factors that can trigger a price increase are the institutional investors who, despite the interest in crypto-space, have so far not entered the industry because of the uncertainty of regulation. He says:
"I think that institutional investors show great interest, but they really did not enter the crypto industry because of some uncertainty about regulation. Nevertheless, this type of investment in cryptocurrencies as a class of assets promises to become a powerful reason for Bitcoin price growth. "
Finally, the data collected by Fundstrat demonstrate a historical trend, judging by which investors should keep their Bitcoins and buy more. That is, if within 10 days the rate is able to fall by 25%, the same is possible in the other direction:
"A jump from $ 8,000 to $ 25,000 can happen in a few days," Lee says.
Earlier this month, Fundstrat Global Advisors published a study according to which the price for BTC in 2019 will reach $ 36,000. An analysis of the ratio of the cost of Bitcoin and the cost of mining gave the company's specialists reason to believe that by the end of 2019 Bitcoin will move between $ 20,000 and $ 64 000. Bitcoin is currently trading at around $ 7,405. Buy BTC it while you can afford it.