Is Bitcoin Bull Tom Lee Too Optimistic About BTC?
Tom Lee, Fundstrat cofounder who earlier predicted that the Bitcoins price would reach $25,000, is scaling back his optimism. Now he suggests that Bitcoin will reach $20,000 by the end of the year, a 20% downgrade from his previous estimate.
Mining Costs Could Bring the Prices Back Up
Lee spoke on Squawk Box, a CNBC program, saying that Bitcoin trades at 2.5 times its mining costs, per historical estimates. He added it’s not out of the question that it could be over $20,000 by the end of the year at fair value.
Speaking on another CNBC program, Fast Money, he said that he “may have misspoke a little bit” earlier and explained:
“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.”
However, he is still hoping that the coin would reach the $25,000 mark by the end of the year. He also suggested that the investors shouldn’t start questioning their investments because of a few-thousand-dollar change in price. Lee explained that any return close to $20,000 would be a 200 percent increase from the current price, which is currently holding below $7,000.
Lee Is Bullish on Bitcoin Even With the Troubling Figures
Lee suggests that the cost of mining Bitcoin is $7,000, and the mining difficulty is rising steadily. He expects that the cost would rise to $9,000 by the end of the year. Considering his 2.5x strategy, Bitcoin should be comfortably above $20,000 if the costs keep rising. Note that the number of Bitcoins is finite, ending at 21 million. Eighty percent of these coins have already been mined.
He is also confident that blockchain technology, the distributed ledger system that underpins Bitcoin, is here to stay. He mentioned that blockchain technology is still in a very nascent stage and compared it with the advent of mobiles and the Internet and how they changed the world significantly.
Is Bitcoin Bull Tom Lee Too Optimistic About BTC? was originally found on [blokt] – Blockchain, Bitcoin & Cryptocurrency News.