Leading Analyst: $6,000 Is Key For Bitcoin (BTC), Momentum Is Reversing
Despite Lower Highs, Bitcoin May Be Bottoming
On Friday, Tom Lee, who recently revealed that he expects for Ethereum to eclipse $1,900 by year’s end, made an appearance on Bloomberg to discuss Ethereum’s cousin or near relative, so to speak. Opening the cryptocurrency segment, the Bloomberg host, highlighting the fact that Bitcoin has found some support in the $6,000 range, asked Lee what Bitcoin’s current price level indicates.
Lee, who is currently Fundstrat Global Advisor’s head of research and its in-house cryptocurrency advocate, first jokingly pointed out that Bitcoin’s lack of movement could signal that it is dying, which was obviously a jab at the criticisms thrown at this crypto asset by legacy capital market investors.
Jokes aside, the BTC permabull noted that the $6,000 is a “much more important price level than we realized,” adding that the break-even cost of mining still remains around the $6,000 price range. Keeping this in mind, the fact that BTC has held above this key support level is “very good news.” The Fundstrat executive elaborated, stating:
And I think there are catalysts into year-end, so despite the lower highs we’ve seen, I think we are starting to reverse. So if you say signs of momentum, that’s really good.
Explaining more about the “catalysts” that he referred to, the Wall Street’s Bitcoin bull brought attention to Bakkt, the cryptocurrency platform in-development that is backed by ICE (NYSE parent firm), Starbucks, Microsoft, and many other prominent names. Lee added that not only is it going to be “one of the better-regulated exchanges,” but also that there is a lot of work around Bakkt that will see “major investment banks” work alongside this startup and establish cryptocurrency-focused infrastructure.
To put it in short, the investor noted that “institutions are still ready to get involved,” drawing attention to the fact that Goldman Sachs, one of the most notable financial institutions on Wall Street, is still “marching forward” with its ambitious plans to enter the cryptosphere, in spite of misreports and ‘fake news‘. Closing off his comments on institutional interest in this budding industry, Lee stated:
I think that major institutions get FOMO (fear of missing out) if Bitcoin rises. Remember, you need to find volatility — institutions today want vol (volatility), so you can buy vol in crypto and it can supplement [your investments].
Pot Stocks And BTC — An Inverse Correlation?
Seeming to have a few more jokes up his belt, the Fundstrat research head, who has become a de-facto face of the financial advisory firm, went on to make a comment about the volatile correlation between cannabis stocks and BTC in jest, noting:
So I don’t know if [there was an option] on Robinhood that allowed you to put on a pair trade there — sell BTC, buy Tilray and Cannabis.
When questioned about the relationship between these two early-stage markets, he explained that speculation is both of these markets could be seen as a “good sign,” as this indicates that there is a strong risk appetite for exposure to assets and investments tied to Cannabis and Crypto.
Closing off his appearance on the financial markets media outlet on a high note, Lee pointed out that crypto investors should continue to hold a focus on Bitcoin, as it has the strongest community, has multiple use cases and is proving itself to be a “meaningful means of exchange.”