No Eggs on This Face: Tom Lee Walks Back Year-end Bitcoin Price Prediction
Fundstrat analyst Tom Lee has always been there for bitcoin. Despite its many ups-and-downs over the last few months, Lee has remained adamant that bitcoin is the future of finance and tech. Is he starting to backtrack?
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The Price Swings Have Been Relentless
Bitcoin has undergone several drops over the past few months. The currency briefly titillated investors as it breached the $9,000 USD territory in April, but has since dropped by about 30 percent, and is hovering at around $6,400 at press time. It’s fair to say that bitcoin is an unpredictable entity that doesn’t always play by the rules, so proposing a year-end price is very much a fool’s errand.
Nevertheless, Lee has been prepared to run it, consistently predicting that bitcoin will end 2018 at $25,000 and surpass levels even higher than those reached last December.
Has the Bitcoin Bull Changed His Tune?
But now, it appears that confidence is fading a bit, and Lee is walking back his year-end prediction. While he still thinks bitcoin could enter 2019 above the $20,000 mark, he states $25,000 may have been a little off-key, and he’s now placing bitcoin closer to $22,000 by year’s end.
“Bitcoin has historically traded at 2.5 times its mining costs. It’s not out of the question that it could still be over $20,000 by the end of the year at fair value.”
Tom Lee Tells Investors ‘Don’t Worry, Be Happy’
Lee’s new prediction includes a difference of a few thousand dollars, but he tells investors not to worry, as a return to the $20,000 mark or beyond is still a massive step forward. He also believes his price prediction will occur due to potential hikes in mining costs, which he says hold true sway over whether bitcoin shifts north or south.
“Cryptocurrency miners use high-powered computers that use a lot of electricity to complete a series of complex calculations to create a bitcoin. The reason bitcoin looks so good here is the cost of mining is around $7,000 fully loaded, and the difficulty is rising, so by the end of the year, it’s going to be $9,000 at least.”
Tom Lee & Co Still in the China Shop
Now that Lee has stepped back a bit, it’s unclear if other bitcoin bulls will do the same. Venture capitalist Tim Draper, for example, predicted bitcoin would reach $250,000 by the year 2022, while CEO of BitMEX Arthur Hayes doubled Tom Lee’s original prediction and claimed bitcoin could reach $50,000 by the time 2019 rolls in. John McAfee’s infamous price predictions remain unchanged.
Will bitcoin end the year above $20,000 as Tom Lee says? Post your comments below.
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