Tom Lee, head of Fundstrat and a crypto enthusiast who is famous for his optimistic vision of the future of the crypto currency, gave a new forecast on the cost of bitcoin. In his opinion, the coin rate of BTC will reach $ 20 thousand by the end of 2018.
In an interview for CNBC, Tom said that Bitcoin's crypto currency, which previously could not correlate with traditional financial markets and assets (for example, gold), showed the participants of the crypto industry the same trend of price changes that is characteristic of emerging markets.
In particular, Lee drew attention to such ETF-fund, as iShares MSCI Emerging Markets Index ETF. Recall that this tool allows investors to diversify their investment portfolio between emerging markets in different regions.
Tom Lee
"Both the BTC and iShares MSCI Emerging Markets Index ETF peaked at the beginning of 2018, but later showed a downward trend," he says.
After the correlation of the crypto currency and the investment portfolio, Tom Lee concluded that the high price indexes of ETF-assets will contribute to the growth of the Bitcoin price.
"Why do I think that these tools are interrelated? There are at once two facts confirming this. The first is that hedge funds often buy shares in new markets that are just experiencing their formation. They risk money, and when institutional investors take risks, bitcoin suffers. The second confirmation is the so-called "wealth effect". This means that in the event of a new market falling, investors have significantly less money to purchase BTC coins, "Tom added.
Forecast: $ 20,000 by the end of 2018
Regardless of the weak ETF trend in emerging markets, Tom Lee believes that the cost of the world's first crypto currency will begin to increase rapidly. In his opinion, by the end of this year the BTC will reach the level of $ 20 thousand.
Explosive price increases may occur until December because of the relationship of financial markets to the devaluation of the US dollar.
Recall, on July 6, Tom Lee lowered his forecast for the MTC from $ 25 thousand to $ 22 thousand by the end of the year. Now, in connection with the emergence of new guesses, the forecast has changed once again.