Fundstrat’s Thomas Lee has lowered his Bitcoin price forecast for this year to $22,000 from $25,000.
In making his case the co-founder and managing partner of Fundstrat argued that the price of Bitcoin should be double that of the flagship cryptocurrency’s mining costs. With the mining cost of Bitcoin currently at US$9,100 according to Lee, doubling this cost while including other variables should see the price of the cryptocurrency reaching US$22,000 before the end of 2018.
Lee went on to argue that the Bitcoin Price to Mining Breakeven cost (P/BE) cost metric was currently lower than 1 and miners thus needed to boost the price in order to operate profitably. He was speaking during the 2018 Asia Blockchain Summit held in Taipei, Taiwan where he was one of the guests.
Referring to the Bitcoin Misery Index (BMI) which he created and unveiled this year, the co-founder of Fundstrat Global Advisors said that Bitcoin had already reached a bottom. According to Lee, the BMI’s current reading is less than 30 and this is a bullish signal since the closer the index is to zero the stronger the suggestion for investors to buy.
Per Lee, some of the reasons why the price of Bitcoin is still way below the record high it hit last year include regulatory uncertainty. He also suggested that Bitcoin was being hurt by futures contracts.
Lee also noted that the bearish sentiment this year was more severe than the one of 2014. Four years ago it took around 300 days for the price of the largest cryptocurrency by market cap to fall by over 70%. This year, however, a similar drop occurred in a period of 200 days.
Lee first predicted that Bitcoin would hit a price of US$25,000 by year-end earlier this year in April.
“We still feel pretty confident bitcoin is a great risk/reward, and we think it can reach $25,000 by the end of the year,” CCN reported Lee as having said in a television interview.
Only time will tell if Lee’s latest Bitcoin price prediction will come true. During this year’s Consensus conference, which was held two months ago in New York, Fundstrat’s managing partner had predicted that there would be a rally in the cryptocurrency markets. However, the price of Bitcoin actually fell while the total cryptocurrency market value dipped by more than $40 billion during the event.
Despite the disappointment, Lee still stuck by his forecast of Bitcoin reaching US$25,000 by year-end. Until now.
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