Tom Lee, of Fundstrat, is adamant that Bitcoin will rise to USD25,000.
On Wednesday, the cryptocurrency plummeted below $ 8,000 and was traded at around $ 7,500, essentially giving up most of the gains Bitcoin had made from mid-April to early May after reaching the 2018 lows .
But Lee not only believes that Wednesday's fall is due solely to "typical cryptographic volatility," as he said in an email to CNBC, but also identifies three key factors that make him believe that Bitcoin will reach $ 25,000.
The first is the cost of producing and replicating Bitcoin. When the Bitcoin was quoted at around $ 8,000 on Tuesday, Lee appeared on CNBC's "Futures Now" saying that the digital currency was actually "operating at cost" because the production price was actually that amount.
Despite the crash, Lee also wrote to CNBC that the cost of producing Bitcoin on Wednesday was around $ 6,000, which means that in Lee's eyes, Bitcoin is still worth more than its production cost.
But among the great catalysts that will drive the cryptographic space, Lee is watching institutional investors.
"I think institutional investors have been very interested, and they have not yet entered into cryptography because there is still some regulatory uncertainty," he said on CNBC's "Futures Now." "But that kind of final assignment in crypto as a class of assets is going to be a powerful reason why bitcoins are repeated."
And finally, the data compiled by Fundstrat shows a historical trend that makes Lee encourage investors to keep Bitcoin.
"Historically, 10 days comprise all the performance in any year of the Bitcoin price," he said. "If you took those 10 days, the Bitcoin went down 25% per year."
"As miserable as the Bitcoin looks at $ 8,000, the change from $ 8,000 to $ 25,000 will occur in a few days," he added.