Fundstrat Global Advisors Co-Founder Tom Lee is kind of like the Harlem Globetrotter of crypto. He’s got to “balance a top-down strategy view and a bottom-up fundamental view” to come up with his analysis, all the while trying to make it down the metaphorical court to score while invisible forces do their best to knock the ball, or in this case the bitcoin price prediction, out of his hands.
Last year, those invisible forces played out in the way of Bitcoin Cash hashwars compliments of Craig Wright and Bitmain’s Jihan Wu, which Lee suggests “undermined investors’ confidence” so badly that the bitcoin price is still recovering.
While Lee has a winning record dating back to his days on Wall Street, last year was different. The crypto bears stole the ball, keeping a tight grip and strutting their stuff kind of like the kid in the below video while all anyone else could do was stand back and watch.
Dude gets on line after Globetrotters game to pose for video of him spinning the ball on his finger, Globetrotters player is in for a surprise pic.twitter.com/QqwQVJgnUb
— Darren Rovell (@darrenrovell) March 16, 2019
Despite last year’s misses, Tom Lee is back for more, telling CNBC it could be just a matter of months before bitcoin “starts to look technically like it’s back in a bull market.” Before that, bitcoin must cross above its 200-day moving average, which Lee expects will happen by August as long as it can hold $4,000 here. The next price he mentioned was $6,000.
It’s a risky bet for many reasons, not the least of which is that he recently stated that he was out of the bitcoin price prediction business. Back in December 2018, he declared: “We are tired of people asking us about target prices.” That was short-lived.
If he’s right, a reversal in sentiment couldn’t come soon enough for the crypto community who have suffered through bitcoin’s longest bear market in the leading cryptocurrency’s history.
The bitcoin price is once again trading above the psychologically important $4,000 threshold. The gains are being underscored by robust trading volume of $9.8 billion, which suggests the rally could have legs. Plus, volume surpassed $11 billion on March 15 for the first time in nearly a year. Lee has every reason to be optimistic.
Besides, last year bitcoin didn’t trade rationally. Just ask Lee. After predicting that the bitcoin price would end 2018 at $25,000, it soon became apparent that it would take a miracle for that to happen. Things started to unravel at about this time last year when he attributed bitcoin’s declines to “tax selling” that never seemed to end.
Lee remained steadfast in his bullish outlook, however, blaming the market for being wrong and maintaining even as the price was stuck in the same range where it is today that fair value was nearly $15,000.
What a difference a year makes, and 2019, which Lee calls “a year about repair,” is off to a solid start. The bitcoin price is up 5% year-to-date and as previously mentioned it’s trading above $4,000 again.
If you ask Lee, the global macro-economic picture is stronger this time around, thanks to a “risk-on rally in global markets that’s positive for bitcoin.”
Plus, last year bitcoin faced a headwind of a surging dollar, which isn’t the case in 2019. The BTC price, he said, is highly correlated to emerging market equities. The technical signals have also stabilized, and the fundamentals are improving as well.
For instance, crypto never thought it would see the day when JPMorgan, of which Tom Lee is an alum, issued its own stablecoin, which is happening. And in developing countries such as Venezuela, crypto adoption has become more of a necessity than a luxury.
Crypto markets are unpredictable. The market forces that interfered with Tom Lee’s predictions from materializing in 2018 may not be the same in 2019, but who’s to say that other, unpredictable hurdles won’t rear their head?
Who could have predicted the hashwars that played out between Bitcoin ABC and Bitcoin Satoshi Vision (SV)? Or the U.S. SEC crackdown on ICOs despite ambiguity surrounding security tokens? The point is there will always be something, and depending on which way the wind is blowing, the bitcoin price may or may not react.
Whether Tom Lee is about to redeem himself with his latest bullish outlook or he’s playing a fool’s game remains to be seen. We know where he stands. The ball is now in the hands of market forces. And perhaps Craig Wright.