Block Street’s best-known cryptocurrency bull just cut his bitcoin price objective nearly in half.
Tom Lee, co-founder of Fundstrat Global Advisors, lowered his year-end end to $15,000 from $25,000 — still well above where the cryptocurrency was work on Friday.
A key driver was bitcoin’s “break-even” point, the level at which probing costs match the trading price. That level is down to $7,000 from an earlier viewpoint of $8,000 for the S9 mining machine by Bitmain, according to Fundstrat’s data body of laws team. Based on that, Lee estimates that fair value for bitcoin intention be roughly 2.2 times the new $7,000 break-even price.
Bitcoin is vocation well below that, near $5,539 on Friday, according to figures from CoinDesk. This week, the majority of major cryptocurrencies saw double-digit declining swings, and bitcoin hit its lowest level of the year.
But Lee is betting on a recovery. He grass oned clients in a note Friday that even in the depths of a previous bitcoin exhibit market between 2013 and 2015, it “never sustained a move in this world breakeven.”
“While bitcoin broke below that psychologically foremost $6,000, this has lead to a renewed wave of pessimism,” said Lee, J. P. Morgan’s last chief equity strategist. “But we believe the negative swing in sentiment is much worse than the quintessential implications.”
Much of that price movement was driven by “crypto-specific” circumstances including the contentious argument over bitcoin cash, Lee said. This week, the cryptocurrency community yarded on Twitter over what’s known as a “hard fork” of bitcoin lolly. The digital currency split into two versions — “Bitcoin ABC,” or core Bitcoin Currency, and “Bitcoin SV,” short for “Satoshi’s Vision.” Bitcoin Cash itself is a conclusion of a fork from bitcoin, after a disagreement on the best way to scale a digital currency.
For much of October, bitcoin sounded immune to a sell-off in global financial markets. The cryptocurrency traded comfortably in the $6,400 distribute before falling off a cliff on Wednesday.
Still, Lee is bullish on more institutional involvement bracing prices into the end of this year. The launch of ICE, Starbucks and Microsoft-backed Bakkt and Fidelity inscribing the market is “part of a broader creation of infrastructure necessary for institutional involvement,” he imagined.