Bitcoin Price Will ‘Easily Double’ in 2018, Says Wall Street Strategist

Tom Lee, co-founder of the market strategy firm Fundstrat Global Advisors and a well-known bitcoin bull, sees bitcoin’s price “easily double” this year. While speaking on CNBC’s “Futures Now,” the Wall Street strategist even considered the possibility of seeing bitcoin triple in 2018.

As reported by CCN, Lee initially set his bitcoin price target for $11,500 for mid-2018, and then increased it to $20,000 as the cryptocurrency’s intrinsic value had increased over the last few months due to the growth of new bitcoin wallets, according to him.

Justifying his increasingly bullish take on the cryptocurrency, Tom Lee stated that he thinks it’s still early for investors to “appreciate how much development and uses cases are being built around bitcoin.” To him, bitcoin’s current volatility is just a “price discovery process.”

Addressing those who say bitcoin has no intangible value, Lee said they may be losing some perspective. As a reference, he used the fact that some people said Amazon was worth nothing in the 90s as it wasn’t actually making any money. Taking this into account, the Wall Street strategist said:

“On a long-term basis, [the easiest way to look at bitcoin is] as a replacement or a store of value. So as millennials discover and generate income, they’re going to use it as a replacement for gold. If [bitcoin] gets 5 percent of the gold market, that’s roughly $50,000.”

Following his line of thought, Lee sees Bitcoin getting to $20,000 as it keeps gaining on gold’s territory. Over the last year, bitcoin surged over 1,400%, while gold remained at the $1,300 level. Moreover, as reported by CCN, Google search queries for “buy bitcoin” surpassed those for “buy gold.”

Lee has in the past stated that bitcoin is a good bet for millennials, after comparing this generation’s acceptance for cryptocurrencies as an investment to that of adopting gold among previous generations.

When asked if he would rather by bitcoin over stocks, Lee stated that “even on a risk-adjusted basis bitcoin is going to easily outperform the S&P.” On a near-term basis, Lee sees bitcoin reclaim its December all-time high close to the $20,000 mark. If the cryptocurrency can get to that level in the first half of the year, Lee said, he sees it making an even bigger move in the second half of 2018.

As such, Lee concluded, bitcoin is “something you should own [all year].” Lee, who was JP Morgan’s chief equity strategist from 2007 to 2014 before helping launch Fundstrat, had a “conservative” $25,000 bitcoin price target for 2022 that has now seemingly been increased, if bitcoin performs as he expects it to this year.

BITCOIN REGULATION JANUARY 10, 2018 19:39
Biting the Dust: Bitcoin ETF Applications Forced to Withdraw Under SEC Scrutiny
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Several exchange-traded fund (ETF) providers have withdrawn their bitcoin ETF applications at the request of the US Securities and Exchange Commission (SEC).

Since the launch of bitcoin futures contracts on regulated US exchanges CBOE and CME, a myriad of fund providers have tossed their hats into the ring in a bid to bring the first bitcoin ETF to market by creating funds that would trade bitcoin futures rather than the underlying asset itself.

This group included Direxion Shares ETF Trust, a firm that desired to create leveraged bitcoin funds that would multiply bitcoin’s price movements. Direxion withdrew its application on Jan. 8, citing the SEC’s concern over the liquidity of the futures markets.

“On a call with the Staff on January 5, 2018, the Staff expressed concerns regarding the liquidity and valuation of the underlying instruments in which the Fund intends to primarily invest and requested that the Trust withdraw the Amendment until such time as these concerns are resolved. In response to the Staff’s request, the Trust respectfully requests withdrawal of the Amendment,” Direxion’s Angela Brickl wrote in the firm’s withdrawal letter.

The SEC’s stance toward Direxion’s proposed funds is not entirely surprising. The funds were roundly criticized by mainstream analysts for aiming to introduce heightened risk into markets that are already incredibly volatile.

However, a litany of other fund providers have withdrawn their bitcoin ETF applications as well. VanEck, First Trust Advisors, Exchange Listed Funds Trust (ELF), and ProShares Trust have all filed letters requesting to have their applications withdrawn. None of these firms intended to exercise leverage through their proposed funds, although several sought to offer inverse ETFs, which are designed to return the opposite of the index and are generally considered to be riskier than long ETFs.

ProShares’ withdrawal is notable given that the New York Stock Exchange (NYSE) had sought to list its bitcoin funds on its Arca trading platform. The NYSE had also filed to list Direxion’s leveraged bitcoin ETFs.

The withdrawals of ELF and First Trust, meanwhile, are significant because the SEC had asked for public comment on CBOE’s proposed rule change that would have allowed the exchange to list these funds and exempt them from certain market manipulation regulations.

This is not the first time that fund providers have withdrawn bitcoin ETF applications under SEC pressure, but many analysts predicted that the launch of bitcoin futures would quickly lead to regulatory approval for these products.