Tom Lee's investment advisory firm, Fundstrat, yesterday published a study outlining its outlook for the cryptocurrency markets. It sets new target prices for 2018, and predicts the soaring of some “altcoins”.
Tom Lee BitcoinTom lee is often touted as the first influential Wall Street analyst to be interested in Bitcoin.
Here are the main lessons of this study, reported by Cryptovest website.
New target prices
The first thing we can see is that Fundstrat has decided to broaden the scope of its recommendations for 2018. The consulting firm is no longer focusing exclusively on variations in Bitcoin, and invites investors to also interest other assets such as Ether (ETH), Ether Classic (ETC) or Chinese value NEO.
The company also calls on them to take into account the brakes these markets face – which may be technical in nature, but which may also be related to the threat of tighter regulation around digital assets.
Fundstrat estimates, however, that
“2018 should be a year marked by rises”.
And among the values to watch, it evokes including Bitcoin and Ether. Here are its target prices for the end of 2018:
- Bitcoin : 25 000 dollars
- Ether : 1 900 dollars
- Ether Classic : 60 dollars
This new target for Bitcoin may seem surprising: Mr. Lee had previously predicted that it would not exceed the $ 25,000 threshold before 2022. It shows in any case the enthusiasm of the financial analyst, then that the price of the first digital currency fell Wednesday below the threshold of $ 10,000.
Here is what we read in this study:
“We expect financial institutions to be more comfortable applying their valuation methods to the cryptocurrency markets. Indeed, they have shown their ability to be valued according to market approaches.
Prior to 1995, 92% of new technology-related stock market listings had been profitable. Today, this figure has fallen to 20%. At the same time, the correlation between crypto-currencies and equities, bonds and commodities is low, making them attractive for diversifying its investment portfolio. “
$ 9,000, “the best buying opportunity”
The report says that despite a difficult start to the year for Bitcoin, crypto-markets should experience a relatively bullish year in 2018. Fundstrat also believes that the price of BTC should not fall below 9 000 dollars:
“We think that the best way to apprehend these falls is to look at the retracements that follow them – how much of the previous increase could be recovered. The recent 94-day surge has enabled the price of Bitcoin to increase by $ 16,536 (an increase of 556%). A 63% downward retracement indicates that the price of Bitcoin is expected to fall back to around $ 9,000.
The report goes on to say:
“We estimate that such a level, at $ 9,000, is the best buying opportunity in 2018 – and we would be buyers at such levels.”
Fundstrat also predicts that the valuation of all digital currencies should exceed this year the threshold of 1200 billion dollars (against less than 600 billion today). This growth should be driven by assets offering real use cases.
“From our point of view, the most interesting use cases for cryptocurrencies are the financial tools (transactions, transfers) – the tokens that evolve in this universe should show superior performance to others,” says the company.
An “exceptional” year for altcoins
The report also discusses the outbreak of altcoins in 2017 – it describes an”exceptional” year for them.
In 2015 and 2016, during the soaring outbreak of altcoins, the study indicates that 28% of the values had appreciated more than 200% over a period of three months.
By mid-2017, this figure had increased to 81%. And it would currently rise to 78%.
Fundstrat also spoke about the links between the evolution of Bitcoin and those of altcoins:
“Unsurprisingly, when altcoins fall, it benefits Bitcoin and Ether. When altcoins are blazing, there is usually an outbreak of Bitcoin […] but also Ethereum “
Bet Bitcoin priceIt should be noted that the analyst had successfully predicted, on several occasions, the appreciation of Bitcoin. But he did not expect such an outbreak to take place, while the price of digital currency has increased by nearly 1,500% in 2017.
Last August, he said he expects Bitcoin to reach $ 6,000 by the end of 2017 – a forecast that was largely exceeded by this asset.
At the end of November, while Bitcoin was trading at just over $ 8,000, Lee was raising his forecast. Its target price for the end of the year was now $ 11,500.
A few days ago, the analyst told CNBC that the price of Bitcoin could “easily” double or even triple in 2018.
This new study was published this Thursday, while Bitcoin was ironed the day before the bar of $ 10,000. And the digital currency had managed last night to exceed again the threshold of 12 000 dollars. At the time of writing this article, it was trading at around $ 11,850.