Bitcoin (BTC) had earlier been showing some signs of going past $7,000 and going back to its winning ways. Earlier today, the King of Crypto was trading at $7,178 but has since dropped down to $6,765 at the moment of writing this. Ethereum (ETH) had also shown some signs of recovery by trading at $429 only to drop to $395 at the moment of writing this. Ripple (XRP) exhibited a similar pattern rising to levels of $0.52 in some exchanges, then dropping to $0.48. Litecoin (LTC) was not left behind and had earlier peaked at $122 only to drop to current levels of $114.
These patterns might worry a few seasoned traders who are wondering if the total market cap of the Crypto-verse will drop to below the much dreaded levels of $250 Billion.
But one seasoned Stock market strategist with over 25 years in the business and who is now knee deep in Cryptocurrencies, believes that this period of uncertainty will be brief. The Stock market strategist is no other than Thomas J. Lee, CFA and co-founder of Fundstrat: a company that defines itself as an an independent research boutique. Fundstrat provides market strategy and sector research to its clients in a bid to provide practical road-maps and insights with respect to investing.
According to Lee, the American tax season ends on April 15th every year. What then proceeds is that many Americans receive their tax returns from the American IRS (Internal Revenue Service). The most natural thing Americans do with their refunds is they buy new cars or new electronics. But in very many cases, they invest their money. Traditional forms of investments are the usual mortgage payments, saving for your kids college tuition or even buying some traditional securities.
However, with the ever exciting world of Crypto-currency, a good portion of that money will be invested in popular coins and ICOs and hence boosting the total market cap to safe levels of above $250 Billion.
Another theory Lee postulates, is that many Crypto traders sold off their Crypto earlier in the year as soon as the IRS started announcements of taxing crypto trading profits. This is a very plausible theory for the IRS demands came at a time when crypto trading was at its peak and BTC was around $19,000 and soaring above the Stratosphere.
Lee is quoted as saying:
“Selling pressure for Bitcoin should be alleviated after April 15th…”
This is less than 6 days away. Let as wait and see if Thomas Lee’s predictions are correct. He still maintains that BTC will be $25,000 by December and $91,000 by 2020.
[Photo source, fundstrat.com]