While Bears Throttle Bitcoin, Tom Lee Buys the Pullback
Prominent cryptocurrency exchange, Coinbase, temporarily froze transactions on December 22, 2017, as bitcoin plummeted in one of its biggest dips to date. The exchange has since cleared through the backlog of bitcoin transactions. Having dropped by as much as 47 percent, the investment world responded with mixed reactions.
Bitcoin was not alone in the sudden movements, with ether and litecoin dipping 36 and 43 percent respectively.
For some, the steep decline was more than they could handle, cutting their losses and cashing out their investments. And in the midst of it all, Tom Lee recommended buying the pullback. For the co-founder of Fundstrat, bitcoin’s nosedives are no less than windows of opportunity.
“The intrinsic/fundamental value of bitcoin has risen in the past month given the surge of new wallets and hence, explains the rise in our short-term target price. We are buyers of bitcoin on this pullback.”
Lee has made a name for himself in the cryptocurrency industry by being the only bitcoin strategic analyst from Wall Street. In light of bitcoin’s digital trends, he has had to increase his price targets to reflect the heightened potential.
Lee’s initial target for mid-2018 was raised from $11,500 to $20,000, based on the increased numbers of users with greater levels of transaction volumes.
Simply put, Lee’s prediction would translate to a 37 percent increase from the price of bitcoin on December 22, 2017. At the time of writing, the cryptocurrency has managed to recover the $15,000 handle after dropping to a low just above $11,000.
The sharp drop in prices occurred within a week of BTC-USD reaching a record high; $19,666 during December 17, 2017 on the Bitstamp exchange. For certain, those that bought into the cryptocurrency at that high rate are questioning their investments.
Speaking about his bitcoin forecasts, Lee stated, “Going forward, our projection is wallets (unique IP address) will rise 50 percent by mid-2018 and activity per user up 10 percent from current levels.”
“We are revising our mid-2018 target to reflect the surge in activity in the past few months; that is, the base of users is up,” he explained.
The fact that this is the third prediction Lee has made for his mid-2018 bitcoin target is a true testament to its sheer momentum, as well as its extreme volatility.
Initially having estimated in August that bitcoin would reach $6,000 by mid-2018, Tom Lee found himself making two corrections. At the end of November 2017, he raised his prediction to $11,500, only to increase it again in the following month to a figure almost double his November guess.
Lee has targets in place for bitcoin as far as 2020, with that figure being $25,000 per coin. Surprisingly, this figure has been left untouched, although the motivation may simply be a higher degree of uncertainty after the volatility experienced in recent days.
The Fundstrat co-founder’s predictions have earned him a large group of loyal followers, eager for inside-information on bitcoin’s future value. Although a finance connoisseur, Lee does not have a greater advantage over the cryptocurrency than any other person that is present in the group; he has simply made a name for himself through the gentleness and accuracy of his forecasts.