Fundstrat Global Advisors’ price target for Bitcoin was updated to “over $20,000 by the end of the year”, according to Tom Lee, founder and head strategist of the equity research house. While bullish and predicting a turn of events within the next six months, Lee’s forecast is still a cut of about 20% on the previous price target, estimated at $25,000.
Tom Lee, the only major Wall Street analyst to issue price forecasts for Bitcoin, takes the whole history of Bitcoin and the most recent developments into account when updating the price target, which once was placed at $25,000. Lee explained on CNBC’s pre-market morning news and talk program “Squawk Box” how he calculated the new $20,000 target for the year-end.
Read More: Wall Street Strategist, Tom Lee Predicts Bitcoin Price To Touch $25,000
The world’s largest cryptocurrency by market capitalization remains pressured to the downside overall in 2018, but a wider time frame provides a different story to investors and analysts. BTC is trading more than two times its worth exactly one year ago when it traded at $2,577.
“Bitcoin has historically traded at 2.5 times its mining costs. It’s not out of the question that it could be over $20,000 by the end of the year at fair value,”
Tom Lee later clarified his position on CNBC’s “Fast Money,” saying he “may have misspoke a little bit” Thursday morning.
“What I was trying to illustrate was that given where mining costs will be and applying the historical average of 2.5 times mining costs, that would imply fair value over $20,000, roughly $22,000.”
“We still think bitcoin can reach $25,000 by the end of the year or something like that.”
Tom Lee first issued the $25,000 price target for BTC in September 2017. The digital asset, which is worth 42.1% of the whole cryptocurrency market, according to CoinMarketCap, did rally intensely in Q4 2017, but the bullish momentum peaked at the $20,000 area.
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