Fundstrat’s Bitcoin Price Rally Prediction Fell Flat: Tom Lee Explains Why
Fundstrat founder Tom Lee has said that a bitcoin ETF would help legitimize cryptocurrency as an asset class. | Source: YouTube/Upfront Ventures
Fundstrat Global Advisers is a finance market strategy firm well-known for making bullish predictions on cryptocurrency prices. Co-founder Thomas Lee posted the group’s predictions that the bitcoin price would reach up to $64,000 by the end of 2019, citing the future trajectory of Bitcoin mining infrastructure growth as an underlying cause. He also predicted $91,000 in two years.
Lee, a financial research analyst and Wall Street strategist, has in the past voiced his opinion that bitcoin will overtake gold as a store of value for the newer generations, and made another prediction prior to the fourth annual Consensus conference in New York regarding the crypto market overall.
Lee wrote to clients to point out that during the last Consensus conference, the bitcoin price rose by 69 percent and then 138 percent in the two months afterward. Last year’s conference saw attendance double from the year before, and this year the attendance also looked set to double from around 2,750 to over 7,000. The event took place from May 14 to May 16, with estimates on the actual attendance now reaching as high as 9,000 .
Perhaps due to prior performance and the same conditions arising again, Lee predicted that the market would see a major rally during this year’s conference as well. While Lee pointed out that talks of mass regulation may put a damper on things, the overall message was clear:
“Bottom line: We expect BTC and cryptocurrencies to behave similarly to prior years and rally during Consensus.”
Unfortunately, it didn’t happen. Not only was there no rally but the market lost over $40 billion in value during the conference, with major currencies losing value across the board.
The bitcoin price, meanwhile fell 3.25 percent to $8,250 by the end of the conference, even dipping below the $8,000 mark today before recovering to $8,262 at the time of writing.
Investors have attributed the dip to a number of factors, including the perception that the conference did not seem to be designed to attract the industry’s core supporters. The ticket prices were considered to be unaffordable at $2,000 a head, and the fact that cryptocurrency was not accepted as payment was criticized as a lack of faith in the technology the conference was held to promote.
The talks were seen as overly shallow and pandering to an audience of newcomers, which was not in keeping with the high cost of the tickets, one of the reasons Ethereum co-founder Vitalik Buterin said he boycotted the event.
Fundstrat’s Thomas Lee called the lack of a rally “very disappointing”, citing a lack of regulatory clarity as the main issue and stated that the space needed major institutions to buy in in order for the space to grow and move past the “blockchain not bitcoin” mentality echoed by several major figures in business and finance.
Despite it all, Lee claimed to be unfazed, saying:
“While there was not a Consensus bump, our conviction on crypto-currencies strengthened during the conference.”
While acknowledging that the cryptocurrency ecosystem still faces internal and external obstacles, Lee said he felt that progress was taking place in increments and that a more defined regulatory framework would see things progress more quickly moving forward.
Featured image from YouTube/Upfront Ventures
