As the markets took a big tumble in the past day to the SEC’s decision to postpone their decision on a Bitcoin ETF, Wall Street analyst Tom Lee is once again weighing in on bitcoin. He states that the currency is slowly regaining its market share, a sign that the coin is “returning” following a lengthy series of price slumps that began in January of this year. He advises bitcoin enthusiasts to stay calm and patient as the cryptocurrency continues its gradual ascension of the financial ladder.
Image from Coin360
Seeing the Glass as Half-Full
Long considered one of bitcoin’s biggest advocates, Tom Lee has often spoken of the currency’s price, and predicted positive outcomes when most of his colleagues have fallen victim to negative sentiment. For months, Lee has predicted that bitcoin will finish the year at $25,000, though he recently changed this figure to an even $20,000, meaning bitcoin would be no higher than where it stood in December 2017.
This has aroused skepticism in die-hard bitcoin addicts. At press time, the largest digital currency by market cap is trading for just over $6,500 – hardly something to get excited about considering it was almost $13,000 higher eight months ago. This means bitcoin would need to spike by over $10,000 in just 16 weeks if Lee’s prediction is to come true.
Nevertheless, the financial expert has stuck to his guns about bitcoin’s ending value, which in turn has caused many notable figures in the cryptocurrency arena to weigh in with their own predictions. Arthur Hayes – co-founder of BitMEX – believes that bitcoin could end the year at $50,000, while Tim Draper alleges that bitcoin will strike $250,000 in 2022. Tom Lee has also offered additional predictions, stating that bitcoin could hit the $91,000 mark in 2020.
The Good Stuff is Usually Invisible
Lee fully admits that bitcoin’s price is nowhere near his initial end-of-year figure, nor does he believe the price is where it should be. However, he says the currency’s market value is the true indicator of bitcoin’s strength, and he alleges it’s slowly returning from oblivion.
“The news that we have seen from the SEC saying bitcoin’s a commodity, to the potential for an [exchange-traded fund] is causing investors to decide that bitcoin is the best house in a tough market,” he recently explained on CNBC’s “Fast Money.” He continues on to say, “Bitcoin isn’t broken if it’s holding at its present levels. I think people are afraid it is going to go back down to $6,000 or whatever, and that it will never come back from those bear markets.”
The biggest indicator of bitcoin’s strength, he asserts, is the “regaining of its market share.” At the time of writing, bitcoin dominates nearly half of the cryptocurrency market (47.6 percent). While this is nowhere near the 80 percent peak bitcoin held in January 2017, it’s a solid mark above the weak and unstable 36 percent it possessed just a year later.
Some Big Announcements
In addition, big things are happening in the bitcoin space that Lee believes could potentially assist the currency’s market value to grow even further. For example, the Securities and Exchange Commission (SEC) recently made it clear that bitcoin was not – and never would be – a security but was, in fact, a commodity, along with most other forms of crypto. While regulation may still occur in the future, one can expect to witness legislation that will be less stringent and easier to bear.
In addition, the Intercontinental Exchange announced last Friday that it was entering partnerships with several major companies – including Microsoft and Starbucks – to potentially build a large, open and regulated digital asset ecosystem.
Conclusion
Lee is confident such a system could assist in bitcoin’s legitimization. He also says that while bitcoin is not “openly” reacting to what’s occurring in the news through relative price increases, it’s growing market value indicates that the currency is garnering a solid financial base.
“I think bitcoin dominance is actually showing that the market is reacting to what’s been taking place,” he claims.
