Thomas Lee, co-founder of Fundstrat Global, doesn’t like to take sides in the bitcoin/Bitcoin Cash rivalry. But holding his feet to the fire, Lee would bet on the No. 1 cryptocurrency over its spin-off, Bitcoin Cash.
Bitcoin and Bitcoin Cash advocates have locked horns over which is the better digital currency, and Lee’s decision isn’t all that surprising given he’s calling for a $25,000 bitcoin price by year-end. Lee tells CNBC:
“I prefer not to pick winners and losers when we’re looking at cryptocurrencies like bitcoin/Bitcoin Cash. I think both have merits. But if I were putting new money to work today, so a fresh dollar, I would be a lot more interested in buying a laggard that could attract inflows rather than something that’s already potentially overbought.”
Earlier this month, cryptocurrency fund manager Brian Kelly similarly made headlines for betting on Bitcoin Cash, the No. 4 digital currency based on market cap whose followers believe is the Second Coming for its features that capitalize on bitcoin’s issues — transaction speed and cost. The Bitcoin Cash price rallied in recent weeks amid an upcoming hard fork that’s scheduled for mid-May.
Lee suggests that Bitcoin Cash is “overbought”, pointing to Kelly’s “new entry” in Bitcoin Cash as helping to drive the price higher, though the BCH price has pulled back some from last week’s rally.
Meanwhile, Lee has been arguing that bitcoin has bottomed and recently tweeted that institutional interest “is a leading indicator for flows of big money into crypto.”
Just yesterday, Thomson Reuters unveiled survey results that indicated 20% of financial institutions may begin cryptocurrency trading this year, underscoring what Fundstrat’s Lee is observing as well.
“More clients are starting to be very serious about how they want to have exposure to this asset class. And so we’re having conversations with people you would never think would actually have an interest or want to talk about crypto,” said Lee on CNBC.
CCN recently reported that Goldman Sachs was moving closer to launching a proprietary cryptocurrency trading desk amid the addition of a cryptocurrency trader to spearhead its digital assets platform. Fundstrat’s Lee tells CNBC it’s a sign that cryptocurrencies are becoming “mainstream”.
Fundstrat’s Bitcoin Misery Index (BMI) is currently hovering at about 47 after being stuck below 20 earlier this year. The higher the reading on the BMI, the more jubilant traders feel about bitcoin. “Historically, as BMI moves up, the bitcoin price usually accelerates,” said Lee.
Featured image from Shutterstock.
Last modified: May 20, 2020 8:50 PM