Tom Lee, the co-founder and head strategist of Fundstrat Global Advisors, has announced some changes in his Bitcoin price forecasts for this year. Now the price that is predicted makes nearly $22,000.
For making such a conclusion Fundstrat’s co-founder supposed that the price of Bitcoin should be a result of doubling of its mining costs. Taking into consideration that the mining cost of Bitcoin should be approximately US$9,100 by the end of the year, Lee has doubled this figure and included some other variables, as a result comimg to a conclusion that the price of the cryptocurrency should reach $22,000 before the end of 2018.
Though the announced price of more than $20,000 per unit still sounds rather impressive, this figure is 20 percent lower than Lee’s previous estimate. Let us remind, that earlier this year we have already written that according to Tom Lee Bitcoin should hit $25,000 in 2018.
As Tom Lee told the journalists:
“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”.
Nevertheless, Lee highlighted that investors should leave their doubts and fears related to forecasts’ updates aside. The difference between his updated forecasts and the previous one is only a few thousand dollars and in any case the price approaching $20,000 would be more than 200 percent higher than current levels.
Despite his new forecasts Lee still believes that Bitcoin has chances to reach $25,000 by the end of December or a little bit later.
Meanwhile, Bitcoin has bounced off the $5,800 lows last week and now it is moving towards the mark of $7,000. At press time, according to CoinMarketCap, Bitcoin is traded for $6,595.60 which means that it has lost 1.48% over the last 24 hours.
According to Lee, Bitcoin price is strongly connected with its mining costs. For cryptocurrency mining today it is necessary to use high powered computers that require a lot of electricity to carry out a series of complex calculations to create a Bitcoin. At the moment, about 80 percent of a finite number of Bitcoins have already been made.
“The reason Bitcoin looks so good here is the cost of mining is around $7,000 fully loaded, and the difficulty is rising, so by the end of the year, it’s going to be $9,000 at least,” explained Tom Lee.
Nevertheless, Tom Lee has made not only short-term forecasts. He has also promised that, by March 2020, Bitcoin should rise to as high as $91,000. Nevertheless, only the time will show whether he was right.
Among the factors that have significant impact on the cryptocurrency prices Lee names regulatory uncertainty. This factor is also one of the reasons why the price of Bitcoin is now below the record high that was hit last year.