Tom Lee, the Wall Street analyst and cryptocurrency bull has dramatically reduced his end of year price prediction from $25,000 down to $15,000. According to Lee the key factor behind his new target is Bitcoin’s “break-even point,” which is the level at which the cost to mine Bitcoin matches its trading price. According to Fundstrat’s data, this point is at around $7,000.
Bitcoin is currently trading significantly below this break even point. However, Lee told clients in a note Friday that BTC has “never sustained a move below breakeven [sic].”
Whilst remaining bullish Lee acknowledges that breaking “below that psychologically important $6,000” leads “to a renewed wave of pessimism.” He also noted:
“But we believe the negative swing in sentiment is much worse than the fundamental implications.”
Lee cites “crypto-specific events” as the primary cause of the recent downturn by the cryptocurrency markets. More specifically he is referring to the recent Bitcoin Cash hard fork which has divided the community.
The recent price decline across the crypto market is the first significant price movement among top coins, and for Bitcoin in particular. In early November, Lee said that he was “pleasantly surprised” by Bitcoin’s stability. At the time, he also believed that the asset had found “its floor at $6,000.” This has been proven to be untrue. If Lees current prediction is correct Bitcoin has under 6 weeks to almost triple in value.