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Wall Street’s Tom Lee cuts his year-end bitcoin price target by about 20%. Tom Lee told the press he sees the world’s largest cryptocurrency by the end of the year at more than $20,000 per unit — 20% less than his previous premonition. “Bitcoin has historically traded at 2.5 times its mining costs. It’s not out of the question that it could be over $20,000 by the end of the year at fair value,” the Fundstrat Global Advisors co-founder said.

“The reason bitcoin looks really good here is the cost of mining around $7,000 fully loaded. And the difficulty is rising. So, by the end of the year, it’s going to be $9,000.”

Digital currency miners use high powered computers that use a lot of electricity to complete a series of complex calculations to create a bitcoin. The bitcoin protocol calls for a finite number of bitcoins of 21 million, of which about 80% have already been made.

Lee, chief equity strategist J.P. Morgan from 2007 to 2014, said bitcoin and blockchain, the technology underlying it, is a “multidecade story” that’s in the “early stages” of transformation.

“I did wireless [research] in the 1990s. I saw 20 years of mobile and internet convergence. To me, this is not that different” in terms of how an industry has change over time, he said.

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