Tom Lee, Managing Partner and the Head of Research at Fundstrat Global Advisors, has been a famed proponent of Bitcoin, appearing on numerous media outlets voicing his seemingly indomitable support for the cryptocurrency.
Even when Bitcoin’s price took an unceremonious fall from grace in 2018 after registering a high of $20,000 in December, the former JP Morgan equity analyst continued his staunch support that still continues today. Before Bitcoin’s rise to 20,000, Lee was already touting Bitcoin and blockchain technology, which forms the basis of cryptocurrencies.
“So the way people in the 80s treated gold as a store of value because they never trusted dollars, I think a new generation of people think of Bitcoin and blockchain it embeds is the store of value,” said Lee, at a time when Bitcoin was priced at $3,530.27 in September 2017.
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A month later, as Bitcoin’s price jumped by 61% to $5,695.69, Lee was eyeing a $25,000 price tag, but recommended crypto investors to not put their proverbial eggs in one basket.
“When we talk about $25,000, we don’t recommend anyone putting 100 percent of their holdings in this instrument,” said Lee.
Near the end of November, the price of the cryptocurrency reached five-digit figures at $10,238.20 and Lee continued to use gold as a strong basis of comparison. If Bitcoin were to capture a certain percentage of gold’s market share, it could send the digital currency’s price into stratospheric levels.
“If it captures just 5 percent of the gold market, it’s $25,000,” said Lee.
By December 12, 2017, the $25,000 price mark looked like it was coming to fruition and Lee was effusive about the success of Bitcoin’s price run, making comparisons to bullish Baby Boomers and the S&P 500.
“This is a millennial story,” said Lee. “So the average millennial is 25 today. The Boomers were 25 in 1982, so what did the Boomers drive from 1982 to the peak population of the Boomers, which was 1999–the S&P 500.”
After hitting a peak of $20,000 and then falling about 37% to $14,564.64 on January 9, 2018, Lee did not fret, but dismissed it as simply a price consolidation that all markets experience at some point.
“There’s a lot of concerns recently about Bitcoin being off its highs, I think it’s a healthy consolidation,” said Lee.
About two months later from that magical $20,000 price, Bitcoin’s market value was almost cut in half to $10,575.40, but Lee continued to trumpet the horn of the cryptocurrency, stating that it would come back to $20,000 by summer of 2018.
“20,000 by June is very reasonable and then $25,000 by the end of the year,” Lee said.
Confidence in Bitcoin by investors was mostly nil come May 22, 2018 at a price of $7,783.34, but Lee underscored that blockchain technology was the technological advancement that would drive future business. As such, its connection to cryptocurrencies would, in effect, help drive them up.
“The notion of blockchain as a way to solve trust in the digital world has gained a lot of traction especially at a consensus,” said Lee.
As the price of Bitcoin fell below $6,000, Lee would still not relent from his initial price targets even as investors and analysts scoffed at the notion.
“We still think Bitcoin can reach $25,000 by the end of the year,” said Lee.
Come July 17, 2018, it appeared bulls might be regaining control of the cryptocurrency as the price reached $7,405.09–a perfect opportunity for Lee to establish the premise that Bitcoin’s massive market correction was over.
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“We’re nearing the end of a correction, but also if you look forward six months, you’re going to do pretty well owning Bitcoin,” Lee said.
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