Lee also some of the reasons which caused the resistance for the Bitcoin price rally last week.
The world’s largest digital currency Bitcoin is showing some good recovery of 2% in the last 24-hours after consolidating at $8200 over the last weekend. On the other hand, some of the less popular altcoins like Tron (TRX), AirSwap (AST) and Ontology (ONT) have been record-gains in the range of 10-20 percent. The crypto market is showing some signs of recovery after a disappointing last week which witnessed the Consensus 2018 conference with a record number of attendees to the event.
At the press time, Bitcoin is trading at $8479.29 with the overall market valuation at $385 billion. The intraday high of Bitcoin is $8562.41.
Fundstrat Global advisor and long-time Bitcoin bull Tom Lee had predicted a strong pull-back for Bitcoin and the overall cryptocurrency market before the commencement of Consensus 2018. While taking a cue from the post-Consensus-market reactions of the last few years, Tom Lee was ultra bullish on Bitcoin where he said that the cryptocurrency could gain anywhere between 10-70 %, in a note to his clients. He said:
“Already one of the largest crypto conferences in the world, attendance this year is up dramatically and coming at a time when Bitcoin/Crypto is down YTD. Hence, we expect the Consensus rally to be even larger than past years.”
In fact, on the contrary, things turned out to be pretty disappointing this year where Bitcoin tanked by nearly 10% during the three-day conference with the overall market valuations losing $45 billion during the same time period. However, soon after the event concluded, Lee owned up for his bad prediction in another note to his clients in which he mentions some of the reasons for the failure in the Bitcoin price rally.
According to Lee, one of the major reasons for the slow pace of adoption of Bitcoin among institutional players was the lack of clarity from regulators like the Securities and Exchange Commission (SEC). According to Bloomberg, Lee wrote:
“Crypto still faces significant internal resistance and hurdles within traditional financial institutions, but it is encouraging, nonetheless, that a large share of incremental attendance are financial institutions.”
On his Twitter account, Lee stated three major reasons for a disappointing turn-out at the Consensus 2018. He wrote: “CRYPTO: #Consensus2018 rally did not happen, very disappointing. What we needed was a trifecta of progress: (i) institutional custody/tools; (ii) buy-in by banks/investment managers; (iii) regulatory clarity (3 of 3 needed), but we got progress on (i) and (ii).”
CRYPTO: #Consensus2018 rally did not happen, very disappointing. What we needed was a trifecta of progress: (i) institutional custody/tools; (ii) buy-in by banks/investment managers; (iii) regulatory clarity (3 of 3 needed), but we got progress on (i) and (ii). Full text below pic.twitter.com/XcqNhgYgK7
— Thomas (Tom) Lee (not the drummer) FSInsight (@fundstrat) May 18, 2018
However, Lee said that the conference offered the opportunity to strengthen the community’s conviction. He said:
“Conferences are chances for the community to gather in a centralized place and meet constituents new to the community, it seems natural that the combination of “sanity check” plus “new interest” should strengthen the crypto-community’s conviction.”
On a positive note, Lee mentioned that during the conference, several institutional service providers and institutional custody solutions were released, indicating significant progress in the crypto space. He said:
“It is obvious that crypto still faces significant internal resistance and hurdles within traditional financial institutions. In our many conversations with institutional investors/banks, we find that specific teams may be enthusiastically committed, but widespread internal acceptance of crypto/blockchain faces hurdles”
While concluding his note to his clients, Lee said:
“While there was not a Consensus bump, our conviction on cryptocurrencies strengthened during the conference.”