CAN BTC BE BACK AT 20K SOON?

Thomas Lee’s research summary

Looking back on the first quarter of 2018, it was a painful period with a drop of more than 50% in BTC value. Since Thursday’s sudden Bitcoin price surge, more and more bullish predictions have been appearing on the horizon. Thomas Lee, head of research at Fundstrat Global Advisors, believes, like many others, that the price drop was a result of the tax season, and the sell-off is over now. He is pretty sure that a spectacular rebound is coming.

In Lee’s April 5th report he is taking a closer look at the numbers behind the tax season. He says U.S. households owe around $25 billion in crypto-currency capital gain taxes. What’s the easiest way to pay it off? Bitcoin holders have have chosen to sell off some of their coins since the beginning of this year. And it’s not only law-abiding citizens but exchanges, too, who have been facing serious crypto-taxes. Lee believes that the exchanges have also sold off some of their crypto-currency holdings, to cover due crypto-taxes.

"Many exchanges have net income in 2017 [of more than] $1 billion and keep working capital in [Bitcoin, Ethereum], not USD – hence, to meet these tax liabilities, are selling BTC/ETH," Lee writes in his report.

With people either selling or just holding onto their coins, there's been less demand in the first quarter. As the year started, first people just stopped buying crypto, and later started selling, which resulted in a down spiral of crypto values. The crypto-currency market was worth $829 billion on Jan. 7, but it now sits at $316 billion, according to coinmarketcap.com

Taxes are due on April 17, so except for the minority of tax-payers who leave it to the last minute, the adverse effects of the tax season are gone. If Lee’s analysis is correct, prices can effortlessly rebound to previous highs of around $20,000. As for Lee’s prediction, the price of Bitcoin will reach $20,000 again by July 2018.

For the end of the year, he sees the price of Bitcoin at $25,000, however, many analysts would say that estimate is too cautious and conservative…

 

Source: https://moneymorning.com/2018/04/14/why-bitcoin-btc-prices-could-skyrocket-200-after-april-17/

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