Tom Lee still believes in his price forecast for bitcoins
Tom Lee, known for his bitcoin optimism, maintains his predictions about his price. What are the factors that speak for the price increase of the most-known cryptocurrency?
According to the CNBC information of May 23, Fundstrat Global Advisors co-founder and strategist Tom Lee maintains his forecast regarding the price of bitcoin. According to this forecast, bitcoin will reach a price of USD 25,000 by the end of 2018. Tom Lee gives out three key factors that, according to him, support this scenario.
On Wednesday, the price of bitcoin fell below USD 8,000 and fluctuated around USD 7,500, losing most of the profits earned from mid-April to early May. Tom Lee believes that such drops are the result of a typical price volatility of cryptocurrencies and explains their optimistic position with three main factors that support the increase in the price of bitcoin.
The first key factor is BTC production costs. Lee estimates the cost of producing 1 BTC at approximately 6000 USD. On Tuesday, in an interview with CNBC, Lee stated that bitcoin is sold at the cost equivalent price, because the BTC price is almost equal to the transaction price.
Another important factor mentioned by Tom Lee are institutional investors. They are interested in cryptocurrencies, but have not entered this market due to the uncertainty associated with regulations. Lee believes that investing funds in the cryptocurrency market will be a powerful factor in the price increase of bitcoins.
The last important factor that Lee pays attention to is the historical price trend of bitcoin. As stated, historically 10 days reflect the behavior of bitcoin prices throughout the entire year. Considering the last 10 days, the drop in the BTC price is 25%, which is the equivalent of the decrease from the whole year. Lee considers $ 8,000 to be a very "miserable" price and claims that it is possible to move up to $ 25,000 in a few days.
Earlier in May, the company Fundstrat Global Advisors disclosed its forecasts for the price of bitcoin at USD 36,000, based on historical averages. The analysis of the relationship between BTC extraction costs and its price leads analysts from this company to predict the price range of the most-known cryptocurrency at the level between 20,000 USD and 64,000 USD at the end of 2019.
We will know in the next two years whether these bold forecasts will work. The recent increase in bitcoin prices has also been announced by John