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.

Bitcoin Futures Volume on CME Explodes Reaching ATH

Colin Muller

Trading of Bitcoin futures on the Chicago Mercantile Exchange (CME) has reached its highest volume ever during the past few days of rallies across the cryptoasset markets. The CME, along with the Chicago Board Options Exchange (CBOE), are currently the only regulated Bitcoin futures markets operating in the US.

cmeVol.png(source: Cmegroup.com)

Data from the CME’s website show that 18,338 contracts were bought on 19 Feb. alone. Each contract is comprised of five bitcoin - so on average, about $360 million worth of volume was traded on the CME in one day.

cmeVol2.png(source: TradingView.com)

The CBOE Bitcoin market - which trades one-bitcoin contracts - did not however see a similar, unprecedented explosion in trading. This divergence is consistent with 2018’s trend, as CME Bitcoin trading has continuously risen versus CBOE’s falling Bitcoin volume. CME Bitcoin trading was outpacing CBOE trading by mid-2018 by about six times, according to the Financial Times.

cboeVol.png(source: TradingView.com)

Of course, speaking about the regulated Bitcoin futures markets segues into the less-regulated ones, principally BitMEX. And in this regard, BitMEX’s most popular Bitcoin futures trading product has seen healthy volume - but not record-breaking.

mexVol.png(source: TradingView.com)

Perhaps this volume on an institutionally regulated exchange signals more institutional buying of Bitcoin.

More Coming

CryptoGlobe recently reported that the New York-regulated Kraken exchange will soon offer Bitcoin futures, making it the first regulated exchange to offer both spot and derivative products under one roof.

And of course, the cryptoasset industry continues to wait for the Bakkt launch, a New York Stock Exchange-connect Bitcoin futures product with daily physical settlement. Bakkt has been repeatedly delayed since its original launch date late in 2018 - but are continuing to prepare for the launch with new hires, as CryptoGlobe reported in January.