IS OPTIMISM MAINTAINABLE?
Do you wonder how people who were super-optimistic earlier see Bitcoin’s end of 2018 value now? Today Tom Lee appeared on CNBC to talk about his views on the Bitcoin market.
Interestingly, Lee appeared twice on the same day. This morning he said that he expected BTC to hit 20,000 by the end of this year. Analysts interpreted his new prediction as a bearish comment. So, he felt it important to reappear on screen a few hours later to comment on his views in more detail.
Lee explained that, though his new prediction is about 20% lower than his previous estimated year-end BTC value, investors should not take it as a negative sign because, compared to the current Bitcoin price, it would still mean a 200% profit on any BTC investment. He said that his forecast should not be taken as bearish at all:
“I do think it’s the first time I’ve ever heard someone thinking something can triple is a bearish comment.”
He believes that the reason that the reactions to his first interview were exaggerated was that he did not explain his point of view as clearly as he wanted to. He underlined that in his view it was very likely that Bitcoin prices would maintain a support value twice higher than the mining costs in the future.
Based on the current numbers and circumstances, he thinks we can conclude that by the end of the year, Bitcoin can exceed 20K and land at the 22k mark.
He also explained that he remained a believer that his previous prediction of Bitcoin at 25,000 can still end up being correct:
“We still think Bitcoin can reach 25k by the end of the year, or something like that… But it’s still a huge move for where it is now.”
He was asked to elaborate on what he bases his prediction on. He mentioned two important and simple factors:
1. High volatility
Bitcoin has proven to have the potential to move from 7k to 10k in a matter of weeks.
2. Bitcoin is trading below mining costs.
And being quoted at a price that is lower than the mining costs almost always means that Bitcoin’s value moves up.
He concluded by saying: “The challenge is, of course, Bitcoin is quite volatile, and it only has a ten-year history. But in its entire history, it always has been a good time to buy.”