Tom Lee, managing partner and head of research at Fundstrat Global Advisors, says he expects a major Bitcoin rally this year.
According to Fundstrat’s recently published 2020 Crypto outlook report, there are three main factors that could cause Bitcoin to surge. They include 1) the upcoming BTC halving event, which will reduce the cryptocurrency’s rate of new supply by 50%, 2) increasing geopolitical risk and 3) the 2020 US presidential election.
Fundstrat also points to Bitcoin’s strong performance in 2019.
“Bitcoin returned 92% in 2019, trouncing all other major asset classes, an impressive return given the significant policy and regulatory headwinds that emerged [during the year] … the Congressional blowback from Facebook’s Libra and the correlated White House bashing of Bitcoin marked the highs for 2019.”
The bottom line, according to Lee, is that the BTC halving event has not yet been priced in, given that financial markets “tend to discount 1-3 months, and maybe 6 months (max).”
Fundstrat analysts see several “positive convergences” that could potentially enhance the economic model of Bitcoin and cryptocurrency at large.
“We believe Bitcoin and crypto total return [this year] should exceed that of 2019. In other words, we see strong probability that Bitcoin gains >100% in 2020.”
This is not the first time Lee has made a bold Bitcoin prediction. He joined a chorus of analysts in 2018 who expected BTC to soar. Lee set his target for that year at $25,000 and later adjusted it to $15,000, only to see Bitcoin end the year at $3,742.
Bitcoin’s price action has proved remarkably difficult to predict. Traded globally, the cryptocurrency can be used to make payments for everything from pizza to cars to luxury homes. It is also increasingly considered as a store of value, rivaling gold.
