Fundstrat’s Tom Lee, a Bitcoin optimistic, said that Bitcoin will likely end the year explosively higher possibly at $20,000.
Lee stated that over the past year, Bitcoin has demonstrated a similar mid-term price movement as emerging markets. “Both really essentially peaked early this year, and they both have been in a downward trend. Until emerging markets begin to turn, I think in some ways that correlation is going to hold and tell us that sort of the risk on mentality is those buyers aren’t buying bitcoin,” said the executive.
“Why do we think they’re connected? Well, there is two factors. The first is hedge funds — see hedge funds typically rent emerging market stocks. So, they do risk-on, risk-off. So, when they’re risk-off, Bitcoin also suffers because they are risk off. The second reason has to do with wealth effect. Wealth effect means that if you are living in an emerging market, and you see your stock market fall hugely, that you will have a lot less money to buy Bitcoin.”
Last week, Germany officially proposed the development of a global financial system outside of the control of the US, due to the intensifying conflict between the US and Iran. Heiko Maas, German foreign minister serving in the fourth cabinet of Angela Merkel, said:
“For that reason it’s essential that we strengthen European autonomy by establishing payment channels that are independent of the US, creating a European Monetary Fund and building up an independent Swift system.”
If Germany pursues its agenda, the value of the US dollar will likely fall, leading to the rise in the price of Bitcoin.
Still, Lee expects the price of Bitcoin to surpass $20,000 by the end of 2018. If emerging markets recover by the year’s end and developments in the global finance industry gear towards the devaluation of the US dollar, Lee believes the price of Bitcoin will experience an explosive movement before December.Trade now