Tom Lee, co-founder and chief researcher at Fundstrat Global Advisors has predicted that the price of bitcoin will hit the $20,000 mark by the middle of the year.
He made these comments in a report published on Wednesday, February 28, 2018, in which he also stated that he expects the cryptocurrency market, in general, to recover within the coming months.
Drawing from historical Bitcoin price trends as well as a number of upcoming blockchain-based applications from notable corporations Tom Lee believes the market will experience another period of price gains.
In the report, Tom Lee mentioned the plan by Rakuten to launch its own cryptocurrency called Rakuten coin.The Rakuten plans to launch a $9 billion blockchain-based loyalty platform. The news which broke out on Tuesday, February 27, 2018, was described by Tom Lee as a “positive development” in the report.
According to Lee, it is an indication that the massive crypto sell-off that characterized the beginning of 2018 was merely an “overshoot to the downside.” The Rakuten cryptocurrency move could see the first large-scale implementation of cryptocurrency by a major e-commerce firm.
Rakuten coin is being envisioned to be a borderless cryptocurrency that will harmonize the entire company’s business process.
Lee, a Wall Street expert is the only major strategist from Wall Street to issue any kind of formal bitcoin price prediction. There are a number of firms in the financial market who publish periodic reports on cryptocurrencies but they all generally shy away from making price projections.
Lee remains bullish on his belief that bitcoin will reach the $20,000 milestone by the middle of the year. He has also gone further to state that he expects bitcoin to end 2018 trading at $25,000.
Relying on historical data, Lee says that bitcoin always experienced price lows during the first 2 months of the year. This trend, according to Lee, has occurred in 6 out of the last 7 years.
Lee is expecting the same trend to continue with normalcy returning to the bitcoin price from March, building up to an incremental price growth which should see the number ranked crypto in terms of market cap, reach the $20,000 mark by June 2018.
The price of bitcoin is currently hovering in the $10,000 region and if Lee is correct, it will have doubled come the midyear period.
Using historical data for altcoins like Zcash and Ripple, Lee advises that investors should wait until the end of March before trading in those two cryptocurrencies. According to Lee, the historical performance of those two coins after a major price decline shows that they only start to post positive price growth towards the end of March.
Lee also predicts that 3 notable corporations will issue their own cryptocurrencies in 2018. Apart from Rakuten, Lee expects both Line and Starbucks to release their own blockchain-based services in 2018.
In the report, Lee also stated that Facebook and Amazon would make some big announcements related to cryptocurrency in this year 2018 as well.
Feature image by Dmitri Nohrin