When it comes to predictions about digital currencies like bitcoin (BTC), investors often turn to experts in the field. Tom Lee, the co-founder of Fundstrat Global Advisors and a longtime bitcoin advocate, fits that bill nicely. Now, Lee's team of financial researchers has revealed a dramatically bullish prediction for the price of the world's leading digital currency by market cap. Fundstrat's Sam Doctor wrote late last week that the price of one BTC could climb to at least $20,000 and might soar as high as $64,000 sometime in 2019.
Prediction Related to Mining
Fundstrat's bullish call is related to the process of mining bitcoin as the cryptocurrency approaches its maximum supply of 21 million coins, according to newsbtc.com. The team believes that the cost of mining a single bitcoin has proved to be a solid support in the past; as the difficulty of mining increases while we approach the last bitcoin's to be mined, this level of strong support will also increase. Bitcoin recently passed the landmark of 17 million coins in supply, meaning that miners are getting relatively close to the pre-set maximum circulation.
Fundstrat's note suggested that "bitcoin miners verify and process transactions, supporting the network in exchange for mining rewards and transaction fees ... we argue that the Price/Miner's Breakeven Cost multiple has proven a reliable long-term support level, and further, that the likely trajectory of future mining infrastructure growth should underpin bitcoin price appreciation into year-end 2019."
Lee Also Predicted a Rally
Just days before Doctor's note, Tom Lee himself predicted a short-term rally for bitcoin. Lee believes that the annual Consensus conference set to take place this week could prompt gains that would place the coin above $10,000.
The 2018 Consensus conference will take place in Manhattan from May 14 to 16, and roughly 7,000 cryptocurrency proponents will be in attendance. Lee suggested that the previous four Consensus events have all pushed the price of BTC up by anywhere from 10% to 70%. Given that Lee believes the price of BTC heading into the conference is down anyway, the rally might be even more potent.
Investing in cryptocurrencies and Initial Coin Offerings ("ICOs") is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns bitcoin and ripple.