Bitcoin Bull Tom Lee Sticking to his $25k Prediction

Avi Rosten
  • The well-known bitcoin bull is still standing by his predictions for BTC, seeing the coin hit $25k in 2018
  • Identifying several factors that will push the price up - Lee sees increasing institutional investmtent as crucial

Tom Lee, Co-founder and Managing Partner of Fundstrat Global Advisors is doubling down on his bullish bitcoin predictions for 2018 despite the recent slump.

In an email to CNBC, the well-known bitcoin bull said that despite the cryptocurrency recently losing nearly all of the gains it has made since mid-April, he still sees the coin hitting his previously predicted high of $25,000 for 2018.

BTC today dropped below the $8,000 mark for the first time in over a month and is trading at the time of writing at $7529 according to CryptoCompare - a 41% drop for the year.

Lee however, attributes this latest drop purely to “typical crypto volatility” and identified several factors that he sees pushing the coin up to new highs in 2018.

The biggest factor in his opinion is the increasing involvement of institutional investors in the crypto space.

Talking to CNBC’s “Futures Now” yesterday, Lee commented:

"I think institutional investors have gained a lot of interest, and they haven't really come into crypto yet because there is still some regulatory uncertainty. But that sort of ultimate allocation into crypto as an asset class is going to be a powerful reason why bitcoin rallies."

Tom Lee

Moreover, historical data from Fundstrat he says corroborate his optimistic outlook:

"Historically, 10 days comprise all the performance in any single year of bitcoin's price," he said. "If you just took out those 10 days, bitcoin's down 25 percent a year. So as miserable as it feels holding bitcoin at $8,000, the move from $8,000 to $25,000 will happen in a handful of days."

Tom Lee

While Lee’s latest remarks were confidently bullish, the influential figure made a notable error of judgement recently when he incorrectly predicted a 70% surge for bitcoin around the Consensus Conference of last week - a mistake he later attributed to a greater need for regulatory clarity.

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Bitcoin Network Usage Close to New All-Time High, Blockchain Data Shows

Francisco Memoria

The number of transactions outputs and inputs on the Bitcoin network have risen to a near all-time high recently, even though the cryptocurrency’s price is down about 40% from its all-time high.

According to Bitcoin Visuals data, there were around 860,000 transaction inputs on the first day of July, a figure close to a high of 885,000 seen in January of 2018, before the bear market saw bitcoin’s price drop over 80%.

Bitcoin transaction inputs per daySource: Bitcoin Visuals

Similarly, bitcoin transaction outputs have recently gotten close to their all-time high of little over a million in late 2017, when bitcoin was at its all-time high of nearly $20,000. While the charts show some activity in mid-2015, it can be attributed to tests related to the scaling debate.

Bitcoin transaction outputs per daySource: Bitcoin Visuals

The data was first spotted by TrustNodes, which noted the charts show “about one million what you’d more plainly call a bitcoin transaction.” Put simply, a bitcoin transaction can have more than one recipient, meaning one single transaction can send funds to various addresses.

This, as one single bitcoin transaction can have various inputs and outputs – various addresses can send funds to various addresses in one single transaction. 

Taking this into account, usage of the Bitcoin network is clearly getting close to a new all-time high. While simply looking at a chart showing us the number of bitcoin transactions shows a similar picture, if we zoom in on it transaction counts appear to be static since April, while actual usage has grown.

TrustNodes adds that if we take the one million transactions number and compare it to that of other top decentralized cryptocurrencies, we see the Bitcoin network is the most used one, even though Ethereum has a higher number of transactions per day.

We also need to take into account its layer-two scaling solution, the lightning network. 1ML data shows the network currently has a capacity of nearly 940 BTC ($10.68 million), and nearly 9,000 nodes. Its usage may soon grow even more, as popular bitcoin wallet Electrum is set to add lightning network support.