Tom Lee, co-founder of Fundstrat Global Advisors and a well-known bitcoin bull, recently appeared on CNBC’s “Fast Money” segment to refute various arguments bears use against the flagship cryptocurrency.
Per CNBC host Melissa Lee, bitcoin bears usually use three main arguments: a decline in search engine queries, a decline in trading volume, and the cryptocurrency’s inability to break through the $10,000 psychological barrier.
Google Trends data shows that searches for “bitcoin” are significantly down this year, but according to Lee this is a “coincident indicator,” and not one that represents investment interest for the cryptocurrency.
This means that while search interest dwindled, it doesn’t imply bitcoin won’t recover in the future. Per the Wall Street analyst, institutional investors are still interested in the market, despite the bearish trend it endured in the last few months.
The bears’ second argument, that cryptocurrency trading volumes are down by about 80 percent since bitcoin’s all-time high in mid-December, seemingly doesn’t concern Lee as well. Per the analyst, cryptocurrency trading volumes are “healthy” when compared to last year. He said:
“You have to remember December was the parabolic blow off for bitcoin, and compared to just the second half of last year bitcoin volumes are up 40 percent, and compared to a year ago the same time, January to June, bitcoin volumes are up 900 percent.”
Finally, as for breaking the psychological $10,000 barrier, Lee pointed to regulatory uncertainty and technical issues affecting the cryptocurrency. He noted, however, that investors need to keep in mind bitcoin makes all of its gains in about 10 days in a year.
As CryptoGlobe covered, Lee has in the past used this argument to claim hodling bitcoin makes sense, as he pointed out that last year 12 days represented the cryptocurrency’s full-year returns. Without these few days, Lee’s firm Fundstrat noted, bitcoin would be down an average of 25 percent per year.
The Wall Street analyst added that in case the cryptocurrency continues its downward trend, it’ll find support at price levels matching the cost of mining one bitcoin. Per his firm, this would mean Bitcoin can fall do a $6,000 price level before bouncing back.
Looking at the charts, we can see that the flagship cryptocurrency has bounced several times from the $7,000 mark, which to Fundstrat’s head of technical strategy Robert Sluymer means this is its bottom. As covered, Lee sees bitcoin hit $25,000 by the end of this year, and a whopping $91,000 by March 2020.