Tom Lee Changes His Bitcoin Year-end Price Prediction

Tom Lee cuts his year-end bitcoin price target by about 20%, “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.” Lee says.

Tom Lee is the only major Wall Street strategist to issue bitcoin price targets and he told CNBC today that he thinks cryptocurrency and bitcoin will go up in 2018 and by the end of the year at more than $20,000 per unit but it is about 20 percent less than his previous estimate of bitcoin.

“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,” the Fundstrat Global Advisors co-founder said on “Squawk Box.”

Cryptocurrency miners use high powered computers that use a lot of electricity to complete a series of complex calculations to create a bitcoin. The bitcoin protocol calls for a finite number of bitcoins of 21 million, of which about 80 percent have already been made. Lee, chief equity strategist J.P. Morgan from 2007 to 2014, said bitcoin and blockchain, the technology underlying it, is a “multidecade story” that’s in the “early stages” of transformation. (CNBC)

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Bitcoin pundits have argued that more regulatory clarity could open up the gates to institutional investors. “We’ve seen the same concerns, including lack of regulatory clarity still holding for the balance of 2018 and keeping many institutions at bay,” said Joe DiPasquale, CEO of BitBull Capital. “We don’t think that demand will happen until 2019 — it’s still a market for those who are earlier movers in crypto.”

It remains to be seen whether bitcoin will live up to some of the bullish calls for it made earlier this year. Fundstrat Global Research’s Tom Lee, the only major Wall Street strategist to issue bitcoin price targets, predicted the cryptocurrency would reach $20,000 by the middle of the year and $25,000 by the end of 2018.

Venture Capitalist Tim Draper predicted bitcoin would be $250,000 by 2022. When asked during an April bitcoin debate how the digital currency compared to his early investments in Tesla, Hotmail and Skype, Draper said bitcoin will be “bigger than all of those combined” and “bigger than the internet.”

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Mohsen Daemi
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