Fundstrat’s Tom Lee Sharply Downgrades Bitcoin (BTC) Year-End Price Prediction
Fundstrat co-founder Tom Lee has cut his Bitcoin price target from $25,000 to $15,000 but remains bullish on the coin’s future.
Tom Lee, co-founder and research chief of Fundstrat Global Advisors, has trimmed his year-end Bitcoin (BTC) price prediction, CNBC reported on Friday. The prominent crypto analyst, who until recently believed the original cryptocurrency would finish the year at $25,000, now expects the coin to be trading at $15,000 by December 31.
The key catalyst for Lee’s revised BTC price target is the falling “break-even point,” or the level where mining costs match the trading value. For Bitmain’s flagship S9 Antminer machines, this point is currently $7,000, down from an earlier estimate of $8,000, according to Fundstrat data. Lee estimates that Bitcoin’s fair value would be roughly 2.2 times the current break-even price, or just over $15,000.
While nearly half the previously forecast valuation, Lee's revised target is still well above the current price. At the time of writing, BTC is changing hands at $5,547, 0.61% down in 24 hours and more than 70% below its all-time high of nearly $20,000 in December 2017.
Lee attributes the recent market downtrend to “crypto-specific events.” These include the Bitcoin Cash (BCH) hard fork, which has left the community and miners split over the direction of the network.
However, Lee remains bullish on the future of Bitcoin, noting that even during the bear market between 2013 and 2015, the coin “never sustained a move below break-even.”
“While bitcoin broke below that psychologically important $6,000, this has lead to a renewed wave of pessimism. But we believe the negative swing in sentiment is much worse than the fundamental implications,” Lee said in a note to clients.
Bolstering his optimistic stance, Lee pointed to the increased interest of institutional investors in the crypto space. Examples include the upcoming launch of the Bakkt crypto trading platform, which is owned by New York Stock Exchange parent company IE, and the entry of US financial services giant Fidelity in the digital assets market. Both are “part of a broader creation of infrastructure necessary for institutional involvement,” Lee said.