Crypto’s ‘Positive Story Remains Intact’: Wall Street Strategist Undeterred by Bitcoin Price Decline
It’s been a dismal year so far for the cryptocurrency markets, and — as evidenced by the Bitcoin price’s more than 50 percent retrace from its all-time high — the volatility has begun to shake out investors with weak hands.
Bitcoin bears have begun to take their victory laps, with skeptics forecasting that its plunge to zero is now inevitable.
Wall Street Strategist Tom Lee, however, refuses to waver from his optimistic outlook — or his bullish Bitcoin price forecast.
Lee, a former JPMorgan equity strategist who now runs market research firm Fundstrat Global Advisors, told clients that now is an excellent opportunity to consider adding to their cryptoasset stakes.
“It has been a terrible few weeks but the fundamental positive story for crypto remains intact,” CNBC cites him as saying in the report, distributed late Thursday night just hours after the Bitcoin price declined below $8,000 for the first time since November.
He told clients not to panic, reminding them that throughout Bitcoin’s history, sell-offs have been generally been followed by significant rallies within a relatively short period of time. Based on this data, he said that it is worth the risk for investors to add to their positions, even if the market continues to decline.
“Past sell-offs were followed by rallies of ~150% within 84 days,” Lee said. “In other words, we think the risk/reward at these levels warrants adding here, even if there is additional downside.”
Lee reiterated that, according to Fundstrat’s valuation model, the Bitcoin price should reach $20,000 by mid-year and ultimately attain the historic $25,000 milestone before the market rings in the new year. He added that the Bitcoin Investment Trust (OTC: GBTC) — which recently executed a 91-for-1 stock split — should trade at $30 during that same timeframe.
Other large-cap coins, meanwhile, have a similarly-bullish future. He forecast that Ethereum, which is currently trading at $943, should more than double to $1,900 by the end of the year, while NEO and Ethereum Classic could reach $250 and $60, respectively.
Featured image from Shutterstock.
