Wall Street Strategist Sees Bitcoin’s Friday Price Plunge as ‘Healthy’
Fundstrat’s Tom Lee sees Bitcoin’s pullback on Friday as healthy. Also, he says that if Bitcoin is a bubble, it’s a small one.
*Fundstrat Global Advisors’ Tom Lee sees Bitcoin’s price plunge as just what the crypto needed after its meteoric price rise over the last six weeks.
He spoke about it on Friday. He also released a note to his firm’s clients citing why he remains bullish on Bitcoin. Specifically, he sees Bitcoin potentially pricing at $20,000 by the middle of next year.*
Let’s discuss.
The fall heard around the world
On Friday, Bitcoin fell by 30% to below $12,000. This fall is from its recent record prices that had been closing in on $20,000. Remember, Bitcoin began trading this year at $1,000, so it’s been quite a year for the crypto.
The increase has been largely attributable to retail investors who have grown increasingly more comfortable with the currency. Bitcoin’s attractiveness as a legitimate investment has also improved due to the entry of players that cater to institutional investors, such as Cboe and CME Group.
Seeing opportunity
As Bitcoin’s price fell Friday, and panicked many investors to their cores, Fundstrat’s Lee took to authoring a note to clients citing reasons he thought it was still game on for Bitcoin. Lee’s the head of research for Fundstrat.
CNBC obtained the note, in which Lee said it’s not a surprise to see Bitcoin selling off now given its price has nearly tripled over the last six weeks.
"We are buyers of bitcoin on this pullback. 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."
Based on higher user volume, Lee is taking his mid-2018 target for the crypto to $20,000 from $11,500. The last time Lee raised his mid-2018 price target for Bitcoin was in November when he raised it to $11,500.
More from the note:
"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. Going forward, our projection is wallets (unique IP address) will rise ... 50% by mid-2018 and activity per user up 10% from current levels."
About Bitcoin being a bubble, Lee said the following Friday.
“Is Bitcoin just trading on pure speculation? Anyone who says that, I’d say they haven’t done their work, and if they say it’s a bubble, it’s the smallest, least held bubble I’ve ever met. I know very few institutions that own Bitcoin, so how can something be deemed a bubble that’s only held by a few?”
by Tedra DeSue
https://cryptovest.com/news/wall-street-strategist-sees-bitcoins-friday-price-plunge-as-healthy/