Fundstrat’s Tom Lee, often referred to as the ‘crypto bull’, has revised his end of year Bitcoin price prediction from $25,000 down to $15,000, which is still pretty optimistic looking at the state of things today.
Bitcoin at $15k By Year End
Speaking to CNBC the co-founder of Fundstrat Global Advisors said that the key issue was Bitcoin’s ‘break-even point’, a level where mining costs match the trading price. For Bitmain’s flagship S9 Antminer the level is down to $7,000 from an earlier estimate of $8,000 according to analysts.
Lee’s prediction is that Bitcoin should be at around 2.2 times the new break-even price of $7,000 which puts it at just over $15,000. This week has been one of the worse for Bitcoin and cryptocurrencies in 2018. BTC fell to a new yearly low of just below $5,400 on Thursday and has failed to rebound much from there. At the time of writing it is trading at $5,540, almost three times lower than Lee’s year end level.
Bitcoin bull Lee is still predicting a recovery citing previous long bear markets in 2014 when BTC never sustained a move below break-even.
“While bitcoin broke below that psychologically important $6,000, this has led to a renewed wave of pessimism. But we believe the negative swing in sentiment is much worse than the fundamental implications,” he added.
Some of the blame has been put at the recent ‘crypto war’ that has broken out on Twitter between opposing Bitcoin Cash factions. The verbal mudslinging and hash power battles that ensued have shown weaknesses and divisions in the crypto community – a group of technology and computer science experts that really should all be striving for the same thing regardless of the specifics of forked chains or ideologies.
Lee added that “part of a broader creation of infrastructure necessary for institutional involvement,” has been orchestrated by the involvement of Fidelity and the launch of Bakkt. The fundamentals for cryptocurrencies have generally been pretty good for the latter half of the year yet the bears have still pushed markets to their lowest levels for over 12 months.
Cryptocurrency markets are currently down again on the day and total market capitalization is hovering above $180 billion which is over 78% lower than its January peak of $830 billion. Coincidentally, or not, the crypto winter of 2014 saw markets plummet by exactly the same amount, 78%, when they fell from over $15 billion to a low of $3.3 billion over a 13 month period.