Bitcoin to hit $25,000 According to a Researcher on CNBC
According to Tom Lee, head of research at Fundstrat Global Advisors, the price of Bitcoin is likely to hit $25,000 despite all of the recent setbacks. Mr Lee was making the comments during a broadcast on CNBC's Fast Money program.
He points out that altough Bitcoin has indeed suffered recently with all of the bearish news that has been emanating from China such as a ban on ICOs and the closure of Bitcoin exchanges. However, this should not be all bad news as once the Chinese traders exit, there could be less volatility.
It was only expected that there should be a selloff right after the announcement. There was about 30% of liquidity value on Chinese exchanges prior to it. Hence, when the announcement came through one could have assumed that there would have been a selloff. This is also not the first time that this has happened and the Chinese have made similar moves in the past.
Mr Lee also points out how far the currency really is from any sort of large scale adoption. He points to research that suggests that the number of wallets that have more than $5k of Bitcoin in them is only about 300,000. This is really quite small in the grand scheme of things. Moreover, he compared this to the initial release of the iPhone in 2007 when there were only 500,000 of them. The innovation of the technology vastly outweighs any perception of realistic norms.
What most people tend to forget is that the Bitcoin technology itself is revolutionary. Blockchain is slated to change the way we think about Finance in the future. Hence the value of Bitcoin should not just be attributed as a peer to peer currency but also on the importance of blockchain. Immutability of transactions as well as the elimination of fraud are strong arguments for the currency.
I think it can be very threatening to financial institutions to see that hey, trust is created on the network and on the distribution network by the way from generation perspective I think people under the age of 30 think that makes perfect sense.
Lee also holds the view that we are likely to see some bearish performance from the stock exchange. As more institutional investors begin to notice that traditional asset classes do not provide the diversification nor returns that they desire, they will probably move into Bitcoin.
This is even more likely now given that LedgerX and the CBOE have got the approvals required to provide Bitcoin options and futures. Institutional investors would like to have the option to hedge their holdings with these synthetic investments. The hope is also that this will lead to a reduction in the volatility of the Cryptocurrency.
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Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.