Home Cryptocurrency All Hope Is Not Lost Yet, As Bitcoin Stages Pullback

All Hope Is Not Lost Yet, As Bitcoin Stages Pullback


The only major Wall Street strategist to formally cover bitcoin raised his price target on the digital currency the day of a massive price rout.

“We are buyers of bitcoin on this pullback,” Fundstrat co-founder Tom Lee said in a Friday note. “The intrinsic/fundamental value of bitcoin has risen in the past month given the surge of new wallets and hence, explains the rise in our short-term target price.”

Lee increased his mid-2018 price target on bitcoin to $20,000 from $11,500 based on higher user volume.

That implies a 37 percent rise from bitcoin’s price on Coinbase of roughly $14,600 Friday afternoon. Bitcoin had plunged to a low of $10,400 in the morning, down 47 percent from a record high above $19,800 reached Sunday.


“We are revising our mid-2018 target to reflect the surge in activity in the past few months — that is, the base of users is up,” Lee said in the report. “Going forward, our projection is wallets (unique IP address) will rise … 50% by mid-2018 and activity per user up 10% from current levels.”

The increase marks the second time Lee has raised his mid-2018 bitcoin price target since initiating it at$6,000 in August. He had previously raised it to $11,500 in late November.

Even with Friday’s declines, bitcoin has soared more than 1,500 percent this year.

“There seems to be some parabolic/speculative surge in bitcoin — this is unhealthy,” Lee said. But “we are not surprised to see bitcoin selling off — the rise in recent weeks, while in part, explained by wallet gains, was also fueled by speculation.”

From a technical standpoint, Lee’s report said $11,000 is becoming an area of support for bitcoin’s price. The next levels down are $10,131, $7,918 and roughly $7,000, the report said.

On Friday, Lee maintained his 2022 target of $25,000 for bitcoin. He also raised his mid-2018 price target on the over-the-counter Bitcoin Investment Trust (GBTC) to $2,200 from $1,300. GBTC has soared more than 1,500 percent this year to $1,990.

In July, Lee became the first widely followed market strategist to issue a report focused on predicting bitcoin’s price. He was J.P. Morgan Chase’s chief equity strategist from 2007 to 2014 before co-founding Fundstrat Global Advisors, where he is managing partner and head of research.

Source: CNBC