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 Trading Volumes Remain Low on Iranian Exchanges, Despite Political Tensions

Tensions between Iran and the U.S. escalated recently due to the shooting of a drone (by Iran’s Airforce) which Iranian authorities claim had entered their airspace - while the American government claims the aircraft never entered the restricted area.

Despite increasing tensions between Iran and the U.S., which have also been exacerbated by political and economic sanctions against the so-called rogue state, the price of bitcoin (BTC) in the Islamic state has remained fairly consistent with international rates.

According to market rates on Exir, a local cryptoasset exchange, no premium on bitcoin is being charged. Currently, there’s also no premium for trading ether (ETH) or bitcoin cash (BCH) on Exir.

Iranian Rial Stops Trading Against USD, Creates Confusion on Crypto Exchanges

As explained by TrustNodes, all three cryptos would have a huge premium if the “official exchange rate” is used. Currently, there are two different currency denominations being used on Iranian exchanges and also two different exchange rates.

Notably, Iran’s national currency is called the Iranian Rial (IRR), however it appears that there are no active trades (buy or sell orders) being placed (quoted) with it.

Tomans Being Used Instead of Iranian Rials

Moreover, the IRR - which is used by Google’s search engine for conversion - seems to have stopped trading at approximately 42,000 IRR to the USD. Should this rate still apply, then it would put bitcoin’s price at roughly $30,000.

However, only Iranian government officials might have access to this particular exchange rate - as nobody in Iran is currently using IRR. In order to conduct day-to-day transactions, Iran’s citizens may be using Tomans - which are essentially IRR, but one zero has been removed from the national currency’s price. Tomans also have their own ticker, TMN, as seen on Exir.

Only $50,000 in Bitcoin Trading Volume in Past 24 Hours

Available data shows that 13,350 TMN are equivalent to 1 USD. According to these rates, one BTC is presently trading at around 123,500,000 TMN - an amount valued at about $9,300. This rate for bitcoin is consistent with most other exchanges throughout the world.

While many countries suffering from extreme political and economic crises have experienced a dramatic surge in their bitcoin trading volumes, total 24-hour BTC trading volume on Exir is only around $50,000.

When taking Iran’s GDP into consideration - which stands at nearly $440 billion (for 2017) - it becomes clear that bitcoin may not be a widely-used means of exchanging value in the isolated nation.