Tom Lee, Bitcoin’s Biggest Wall St. Backer, Is Finally Spooked By BTCbr>
Fundstrat cofounder Tom Lee, the biggest backer of bitcoin on Wall Street, is finally nervous about his pet digital currency. Lee has issued a price forecast that is “cautious” about bitcoin in the wake of its rise to all-time highs.
We are “cautious short-term on bitcoin,” Lee said in a Thursday report, noting that bitcoin has exceeded in price what its fundamentals warrant at the moment. Lee is a former chief equity strategist at JPMorgan.
Fundstrat uses the number of unique bitcoin addresses and the estimated number of transactions per user to come up with its price forecasts. While Lee has been bullish, in August his model indicated a price range of $6,000 per single coin by the middle of next year. Bitcoin is now well above that, clocking in at $7,400 on some exchanges today.
Lee said in his report that bitcoin is held by investors who are chasing price gains, so-called “weak hands,” and who are likely to sell if things go south.
Still, Lee foresees bitcoin at $25,000 by 2022, and forecasts that if bitcoin turns downward, it will find a bottom at $5,000.
Earlier this year, Lee was far more bullish.
“I think bitcoin is an under-owned asset with potential for huge institutional sponsorship coming,” Lee said on CNBC. “It has a lot of characteristics that are very similar to gold that I think will make it ultimately attractive as an alternate currency. It’s a good store of value.”
Lee claimed earlier this year that institutional investors diving into the market as a big driver of future growth. “Institutions have to directly buy the coin today through a broker, but both the CBOE (Chicago Board Options Exchange) and the CFTC (U.S. Commodity Futures Trading Commission) have opened up options futures trading, so I think it’s going to grow in holdings.”