Fundstrat Global Advisers co-founder and the only major Wall Street strategist to cover bitcoin, Tom Lee, recently revealed he sees the cryptocurrency hit a $20,000 price tag by midyear. Behind his vision, according to CNBC, are historical price trends and crypto-related announcements issued by major companies.
Lee addressed an announcement by Japanese e-commerce giant Rakuten, which is set to launch a cryptocurrency dubbed “Rakuten Coin,” as part of the company’s existing loyalty program. Per the Wall Street strategist, this is an example of positive developments within the industry.
“The announcement by Rakuten is another example of positive developments in crypto in 2018, suggesting the large sell-off in bitcoin and others at the start of the year was an overshoot to the downside.”
The strategist reaffirmed a midyear bitcoin price prediction that sees the cryptocurrency double to $20,000. His prediction was based on historical data, as bitcoin usually takes its time to bounce back from the yearly January dip. Lee further sees bitcoin reach $25,000 by the end of the year.
He pointed out that bitcoin’s low for the year usually occurs within the first two months of the calendar year. This, he noted, was the case in six of the last seven years. Similarly, altcoins like Zcash and Ripple drop in the beginning of the year, which means investors should avoid them until late March.
Bitcoin is currently trading at $10,573 according to CoinMarketCap. The cryptocurrency fell from a $19,000 all-time high in December, to little over $6,000 before it started bouncing back. This year’s recovery is being supported by major companies getting into cryptocurrencies.
“In 2018, we forecast at least 3 major publicly-traded corporations to issue native digital tokens. Already three major companies have announced efforts within crypto-currencies, which demonstrate that corporations may be moving towards crypto-currencies before Wall Street has embraced them.”
The Wall Street strategist cited examples of other companies jumping into the cryptocurrency space. Japanese messaging app Line announced last month it will launch a new division to allow users to exchange digital currencies, while Starbucks’ executive chairman hinted the company could use blockchain technology in the future.
In his report, Fundstrat’s Lee further said social media giant Facebook will “likely announce a crypto-strategy this year.” This, as speculation claims the company could start rewarding users, not just investors. Moreover, he claims Amazon could apply a similar strategy.