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.

New Crypto Derivatives Exchange Blade Offers 150X Leverage on Perpetual Swaps

As if BitMEX did not already have enough competitors trying to replace it as the top cypto derivatives exchange in the world, here's one more: Coinbase-backed BLADE is ready to offer up to 150X leverage for trading perpetual swaps on Bitcoin and altcoins once it is launched (in around three weeks).

Perpetual Swaps

The BLADE website defines perpetual swaps (aka "perpetuals") as financial derivatives, similar to futures, that enable traders/investors/speculators/hedgers to easily long and short cryptocurrencies with leverage." It says they are named this way since "they never expire and they are classified as swaps because payments are 'swapped' between counterparties on a periodic basis." They "represent the price of a perpetual claim on an index (e.g. the BLADE ZEC/USDT index)." 

BLADE further says that trading perpetuals is similar to trading the underlying cryptocurrencies, but has two advantages: leverage; and a simple mechanism for shorting.

Perpetuals have the following two advantages over expiring futures:

  • there is no need to roll over futures contracts "from the front month to a further-out month"
  • they trade at prices very close to spot due to "periodic payments which close the gap (or basis) between perpetuals prices and underlying index prices"

BLADE offers both regular/vanilla perpetuals as well as inverse perpetuals: the former are "simpler contracts in which P&L is denominated in the quote currency," while the latter are "more complex contracts in which P&L is denominated in the underlying currency."

What Makes BLADE Unique

BLADE says that it is "the only cryptocurrency exchange dedicated to perpetuals." It offers leveraged trading (up to 150X) on the following pairs (with more to be added in the future):

  • vanilla perpetuals
    • XRP to USD Tether (XRP/USDT)
    • Binance Coin to USD Tether (BNB/USDT) 
    • Zcash to USD Tether (ZEC/USDT) 
    • Monero to Bitcoin (XMR/BTC) 
    • Dogecoin to USD Tether (DOGE/USDT) - Vanilla Perpetuals
  • inverse perpetuals
    • Bitcoin to US Dollars (BTC/USD) 
    • Bitcoin to Korean Won (BTC/KRW) 

Just like BitMEX, BLADE does not accept fiat currency: margin, profit-and-loss, and settlement are all done in crypto (USDT and BTC).

BLADE's Founders and Investors

According to a report by Techcrunch, BLADE was founded by Jeff Byun and Henry Lee, and it has raised $4.3 million in seed funding from a host of investors, including Coinbase, SV Angel, A.Capital, Slow Ventures, Justin Kan and Adam D’Angelo. 

The BLADE CEO told Techcrunch that perpetuals are “arguably the fastest growing segment of cryptocurrency trading.”

To avoid trouble with U.S. financial regulators, BLADE is "an offshore entity with a U.S. subsidiary," and it does not allow U.S. investors/traders to use its platform. Instead, the main focus is on the "bifurcated" East Asia market. Here is Byun explaining what he means:

Either you have exchanges like Coinbase or Gemini or Bitrex that cater to the U.S. market that are highly regulated or the exchanges that cater to the non-U.S. market that are much less regulated, but that’s where most of the volume is.

 

Featured Image Courtesy of Blade Holdings, Inc.