President Donald Trump tweeted a blistering takedown of cryptocurrencies like bitcoin and Libra Thursday. But the savage Trump roast on Twitter might be great for bitcoin. It may even boost the bitcoin price to a new all time high. That’s Fundstrat Global Advisors Head of Research Tom Lee’s prediction.
In an interview on Yahoo Finance, he said:
“On balance, it’s a positive because cryptocurrencies and bitcoin really are in the main stage now — Congress, the Fed, the president weighing in. It’s going to force everybody who is not involved — and remember a very small percentage actually cares about crypto and bitcoin — it’s going to force the other 98% of the world to think about what it means.”
The bitcoin price certainly displayed the digital asset’s resilience and a strong center of gravity after Trump’s statement. He tweeted it out early Thursday evening.
By Friday evening bitcoin was trading slightly higher. Crypto investors didn’t even flinch. Compare that to equities markets that soar and dive on the slightest innuendo from the president or Fed chair.
In the Yahoo Finance interview, Tom Lee bolstered his analysis of Trump’s remarks with a bold prediction. He sees the bitcoin price skyrocketing in 2019. The Fundstrat researcher says crypto’s place in the limelight, along with technical indicators, presage a bull run to $40,000 later this year:
“Bitcoin is now trading at a level that it’s only seen 3% of its historical days. If you go back to every milestone that that was achieved, bitcoin subsequently rallied somewhere between 200% to 400% within the next four months, so I think if that’s playing out this time that means bitcoin could be $20,000 to $40,000 sometime in the fourth quarter.”
According to remarks he’s made earlier this year, Lee expects to see widespread FOMO (Fear of Missing Out) splashing jet fuel on the next bitcoin price run. That would turn a run to $20,000 into a run to $40,000 as new investors who heard Trump talk about the currency enter the market for the first time.
The more nationally-recognized politicians, regulators, and financial authorities push back against cryptocurrency, the more they publicize it. The sudden mainstream push back against the industry also validates and legitimizes it. What are they afraid of unless the industry is actually relevant? This plays out in markets the way the “Streisand Effect” plays out when notorious figures or institutions attempt to censor information.
Furthermore, if regulators succeed in putting the law to cryptos like Libra, they will push this new financial infrastructure to scale more quickly. The Wall Street Journal reported Saturday that the SEC is currently weighing regulating Facebook’s Libra. EOS and Ripple advocates see this as good news for their more institutional currencies. But what’s more likely is a bitcoin price launch.
Because capital will naturally flow in the direction of least resistance. Lawmakers and regulators can hamper corporate altcoins with regulatory compliance rules and costs. But where is the SEC going to mail subpoenas and injunctions to regulate Bitcoin? Here, just mail it to IP: 127.0.0.1.
Last modified: June 23, 2020 2:45 PM UTC