Bitcoin is heading for an exciting year ahead. And by exciting we mean one thing: potentially profitable. The reason? A widely anticipated bitcoin halving 2020.
There are plenty of bitcoin (BTC) price predictions for the current year. Just like you, millions out there are wondering how to maximize their cryptocurrency profits in the next twelve months.
If you’ve been in the cryptocurrency market for a while, you would know that price predictions are simply VERY hard to believe. Some analysts will be extremely bearish, while others give an all shiny forecast. In order words, there is no consistency in the predictions.
So… Which prediction should you follow? A good place to start will be turning to the analysts or market experts that have already built a record of accurate predictions. In this article, we’ll go deeper on the thoughts of Tom Lee — current managing partner and head of research of Fundstrat Global Advisors.
Who is Tom Lee?
If you’re planning on trusting someone with your money, you need to know who that someone actually is. Especially in the so very controversial world of cryptocurrencies.
Thomas Lee, commonly known as Tom Lee, is the Managing Partner and the Head of Research at Fundstrat Global Advisors — an independent research firm based in New York. The firm has been running since 2014, providing fundamental, technical and quantitative research to institutional investors, investment funds, high net worth individuals, among others.
Lee has a solid record in the financial world, with over 25 years in equity research for Wall Street giants such as J.P. Morgan and Salomon Smith Barney. Since 1998, Lee has been awarded as a top Institutional Investor year after year.
Thomas holds a Bachelor of Science in Engineering from the Wharton School at the University of Pennsylvania with focus in Finance & Accounting.
Why his opinion matters?
While he’s been wrong about Bitcoin price a few times, Lee has also excelled at providing real facts to validate his predictions. And, believe it or not, that’s something most so-called cryptocurrency analysts out there keeps failing at.
Following the 2017 Bitcoin bull run, nearly every player on the market believed up was the only possible direction for Satoshi’s cryptocurrency. The excitement was so high on the street that even the New Year crash didn’t change the minds of people.
Around May 2018, Thomas wrongly predicted Bitcoin ending the year at a price of $25,000. In reality, the digital currency hardly ended above $3,000. It was almost rock bottom.
Lee later explained that the divergence between was due a meltdown in the macroeconomic climate as well the inflated boom of initial coin offerings. “Fair value is significantly higher than the current price of Bitcoin,” he noted in an interview at that time.
Thomas correctly predicted a recovery along 2019, which lead the price to a year peak above the $10,000 psychological level. The successful recovery also fueled the market with a positive sentiment, one that clearly reflected on the valuation of several altcoins.
Despite the downward correction at mid-2019, Lee suggested the crypto community hasn’t fully weighed the fact that the “crypto winter” ended. The Bitcoin bull emphasized that the mid-year pullback was healthy in the long-term and that focused remained on institutional adoption.
“As for the search traffic for bitcoin being low, I also think that is a good sign. It means the rise in Bitcoin has not been accompanied by massive hype.”
According to Lee, another factor that influenced Bitcoin’s price in 2019 was the launch of margin products, which positively impacted on trading volumes and volatility.
Tom Lee Bitcoin Prediction 2020
Before the fireworks went off on December 31, Fundstrat’s managing partner suggested Bitcoin’s value increase in 2020 following a similar dynamic than Silicon Valley stocks.
“70% of [FAANG] returns [since public listing] are explained by the growth of the global internet in that period of time. In other words, it’s a logarithmic function of the internet’s growth, and that’s how cryptocurrencies are going to work.”
The latest report by Fundstrat expects a 100% return for investors in 2020, with the strongest increase to be seen in the five months leading to the bitcoin halving 2020.
“For 2020, we see several positive convergences that enhance the use case and also the economic model for crypto and Bitcoin — thus, we believe Bitcoin and crypto total return should exceed that of 2019,” Tom Lee wrote in a note to clients on January 10.
“In other words, we see strong probability that Bitcoin gains >100% in 2020,” said Lee also highlighting positive geopolitical factors such as the upcoming US presidential elections.
Tom Lee Bitcoin Prediction 2022
Mr. Lee says that Bitcoin is on a bullish path and the $25,000 price prediction remains on sight. However, he believes the cryptocurrency will reach such a level in 2022
“Cryptocurrencies are network value assets, meaning the more people hold the asset, the greater the value. In fact, it’s a log function — so if you double the users hold it, you get a quadrupling of value. To go to $25,000 you essentially need a little less than 4x rise, which means you need to double the number of people who hold Bitcoin.”
At the moment, Fundstrat considers there are a little over 500,000 people holding Bitcoin. Following the above mentioned logic, if there would be an addition of half a million holders, Bitcoin could finally reach the $25,000 valuation.
Institutional interest remains a decisive factor for the value of Bitcoin and other cryptocurrencies. In that regard, Lee seems confident that big companies will insist on the development of digital currencies and adopt some of the existing ones for their own ecosystems.
Facebook’s Libra Coin is a perfect example. The cryptocurrency project of the social media giant was largely sabotaged by government regulators in multiple jurisdictions, causing several early stage members of the Libra Association to withdraw from it.