With the close of 2018 in sight, Fundstrat founder and analyst Tom Lee has lowered his year-end prediction on the price of Bitcoin.
Lee now says he believes Bitcoin will hit $15,000 by December 31st, down from his long-standing prediction of $25,000. He is basing his revised forecast on the amount of profit that Bitcoin miners, who validate transactions on the network, can currently make.
As reported by CNBC,
“A key driver was Bitcoin’s ‘breakeven’ point, the level at which mining costs match the trading price. That level is down to $7,000 from an earlier estimate of $8,000 for the S9 mining machine by Bitmain, according to Fundstrat’s data science team. Based on that, Lee estimates that fair value for Bitcoin would be roughly 2.2 times the new $7,000 breakeven price.”
In a new note to clients, Lee compared the current bear market to the one that happened from 2013 through 2016, noting that the price “never sustained a low below breakeven.”
“While Bitcoin broke below that psychologically important $6,000, this has led to a renewed wave of pessimism. But we believe the negative swing in sentiment is much worse than the fundamental implications.”
Lee also points to institutional factors – like the coming launch of Bakkt and Fidelity entering the crypto market – as catalysts that will help boost the price of Bitcoin.
As for this week’s sudden plunge in the Bitcoin and crypto market, Lee points to the tumultuous Bitcoin Cash fork as a leading factor.