Tom Lee, the not major Wall Street strategist to issue bitcoin price objectives, told CNBC on Thursday that he sees the world’s largest cryptocurrency by the end of the year at uncountable than $20,000 per unit — 20 percent less than his sometime estimate.
“Bitcoin has historically traded at 2.5 times its mining gets. It’s not out of the question that it could be over $20,000 by the end of the year at fair value,” the Fundstrat Wide-ranging Advisors co-founder said on “Squawk Box.”
That’s down from Lee’s anterior year-end projection of $25,000.
Tom Lee later clarified his position on CNBC’s “Fast Moneyed,” saying he “may have misspoke a little bit” Thursday morning.
“What I was taxing to illustrate was that given where mining costs will be and auditioning the historical average of 2.5 times mining costs, that choice imply fair value over $20,000, roughly $22,000.”
“We still over bitcoin can reach $25,000 by the end of the year or something like that.”
But he stressed that investors should not subtlety over a few thousand dollars because any return approaching $20,000 would be on every side 200 percent higher than current levels — around $6,600 in prematurely Thursday trading, according to data from CoinDesk.
Bitcoin at $6,600 convinces prices back to the lows in April, which marked the halt of a decline from nearly $20,000 in late 2017. Since its most modern top around $9,800 in May, bitcoin has lost about 30 percent.
In all events, Lee remains undeterred. “The reason bitcoin looks really good here is the expense of mining around $7,000 fully loaded. And the difficulty is rising. So by the end of the year, it’s contemporary to be $9,000.”
Cryptocurrency miners use high powered computers that use a lot of electricity to finish a series of complex calculations to create a bitcoin. The bitcoin protocol attends for a finite number of bitcoins of 21 million, of which about 80 percent accept already been made.
Lee, chief equity strategist J.P. Morgan from 2007 to 2014, mean he believes bitcoin and blockchain, the technology underlying it, is a “multidecade story” that’s in the “beforehand stages” of transformation.
“I did wireless [research] in the 1990s. I saw 20 years of motorized and internet convergence. To me, this is not that different” in terms of how an industry has exchange over time, he said.