By Josiah Wilmoth
Wall Street strategist Tom Lee said that he believes the bitcoin price could “easily” double in 2018, even though the flagship cryptocurrency’s breakneck rally has ebbed in recent weeks.
Bitcoin Price Could Retains Significant Upside in 2018, Says Fundstrat’s Tom Lee
Lee is a co-founder of Fundstrat Global Advisors, the first Wall Street firm to provide clients with an official bitcoin price target. A noted stock market bull, Lee said that although investors should make stocks the core of their portfolios, bitcoin will likely outperform equities in 2018.
“Even on a risk-adjusted basis, I think bitcoin is going to easily outperform the S&P,” Lee said Tuesday on CNBC. “On a long-term basis, [the easiest way to look at bitcoin is] as a replacement or a store of value,” he said. “So as millennials discover and generate income, they’re going to use considering it as a replacement for gold.”
That’s a bold stance. Lee has predicted that the S&P 500 could reach 3,025 by the end of the year, up more than 12 percent from where it entered January.
Moreover, Bitcoin has underperformed the market over the past month and currently sits about 28 percent below the all-time high it set in mid-December. However, this pullback was not entirely unexpected, as the asset’s fourth-quarter explosion had left many analysts hoping it would enter a healthy correction to cool off the markets to more stable levels.
The Road to $50,000
Fundstrat, though, believes that bitcoin continues to exhibit strong fundamentals, namely a growing user base and a steady uptick in transaction volume. These factors, Lee has said in the past, account for the bulk of bitcoin’s 2017 price rally and make the firm bullish on its outlook moving forward.
“We think that by mid-2018, we’re going to be part of the way there, and that’s why we get [bitcoin to $20,000],” Lee said. “If [bitcoin] can actually rise close to [that $20,000 level] in the first half of this year, I think in the second half of 2018, we’ll see a move bigger than that,” he said. “So I think bitcoin is still something you should own [all year].”
“If [bitcoin] gets 5 percent of the gold market, that’s roughly $50,000,” he added.
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Featured Image Source: CNBC