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Is Bitcoin Still Hitting $20,000 This Year?

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Is Bitcoin Still Hitting $20,000 This Year?

tom lee

One of the things that attract people to Bitcoin is the fact that price swings can be quite wild. In 2017, you have Bitcoin starting the year at around $1,000 reaching near $20,000 in mid-December. Now, since then, investors are hoping for another bull run. But this time around, it seems that it isn’t happening soon considering the bearish market the entire year.

However, if you will ask the likes of Tom Lee who works as head research at Fundstrat Global Advisors, he thinks that $20,000 this year is still possible. Tom Lee is known for his bold prediction that Bitcoin is headed towards 22k this year. He mentioned that “It only takes ten days for Bitcoin to see all its returns in a year. So I still believe that ($20,000 by the end of 2018) is possible”.

Positive Indicators

Tom Lee mentioned positive indicators. He noted that the break-even cost of mining combined with favorable “network efforts” can drive the value of Bitcoin. He also mentioned a macro market indicator, the MSCI Emerging Markets Index, that though not really correlated to crypto, is seen by Lee as the Bitcoin’s next “leading indicator”. This indicator basically measures the value of equity markets in the global markets as well as the US-based S&P 500.

He explained that as Bitcoin’s price skyrocketed last year, so did the MSCI Index. Though it can also be a coincidence. However, Lee explained that “So why do we think they’re connected? Well, there are two factors. The first is hedge funds — see hedge funds typically rent emerging market stocks. So they do risk-on, risk-off. So when they’re risk-off, Bitcoin also suffers because they are risk off. The second reason has to do with wealth effect. Wealth effect means that if you are living in an emerging market, and you see your stock market fall hugely, that you will have a lot less money to buy Bitcoin”.

What Tom Lee thinks is that as the emerging markets underperform, the same will happen to Bitcoin. There is also a trend happening today that funds are looking for crypto-friendly and savvy straight-from-college individuals. Meanwhile, you have macro hedge fund managers going to BitMEX.

Bitcoin Misery Index

Tom lee touched on the topic of Fundstrat’s Bitcoin Misery Index. This index calculates the sentiments of crypto traders on a scale of 0 to 100. Right now, it sits in a “very miserable zone” at 36/100. And there are a number of reasons for this. One, you have the SEC’s rejection of Bitcoin-ETF proposal by the Winklevoss. And also, the recent applications suffered a similar fate.

In addition to this, you have China that is now looking to intensify measures in order to stop crypto activities. Chinese authorities prohibited hotels and malls from hosting crypto-related activities.

There’s good news despite the fact that there is still no Bitcoin ETF. For instance, in the past 24 hours, Bitcoin price was able to reach $6,700. The valuation of the crypto market continued its recovery and increased from $210 billion to $215 billion. That is despite the number of bad news happening in today’s crypto market. And also, Bitcoin’s dominance in the market continued as it increased from 51% to 53.6%.

Mark Ayesa

Mark manages our editorial team, social handles and is always on the lookout for great writing talent to contribute to our site. On a day-to-day basis he ensures the content on CryptoCurrency365.com is of the highest quality and also carries out extensive research on any current hot topics of the crypocurrency world for our writers.

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