Bitcoin Bull, Fundstrat Co-Founder, Tom Lee: “Crypto Winter is Over, and Spring has Officially Sprung”
Bitcoin Bull, Co-Founder and Adviser of Fundstrat Global, Thomas Lee (known as Tom Lee) has recently taken part in an interview with CNBC Futures Now to discuss the future of Bitcoin and cryptos.
According to the advisor, “crypto winter” is over, implying that we can expect a bull market with all-time highs by 2020. He starts off by highlighting the fact that:
“There’s only 11 signs that historically only take place in a bull market and I think the evidence is now saying that there is a bull market.”
He added that the most important takeaways include the positive turn on a year to year basis of blockchain transactions, Bitcoin’s current increase in prices with it closing above 200-day moving average and the increase in trading volumes when it comes to over-the-counter (OTC) trading.
— CNBC Futures Now (@CNBCFuturesNow) April 25, 2019
Lee also shared that OTC brokers were surveyed because they play a large role in understanding institutional investors and their involvement in crypto, and as per the findings, investors on a global scale have disclosed the following:
“A 60 to 70 percent increase in activity levels, like number of clients and trading per client really taking off recently. I think we are seeing signs that fundamentals are improving, technicals are improving and now there’s real activity by essential crypto hodlers.”
When asked about the fundamentals improving, particularly whether Lee see’s the acceptance of crypto and Bitcoin by merchants and vendors and how it should play a role in Bitcoin’s value, Tom Lee replied:
“Yeah I think that it’s really important for that to take place in the US for adoption because there’s a really well-established financial system but what we have to remember is that crypto is probably 70% of story outside of the US. I think that events like Venezuela […] with the devaluation of Turkey Lira these have caused on-chain volumes to take off.”
He further noted that both the above-mentioned countries alone amount to 30% of the global crypto market, which may look small at first, but can exponentially grow if all other countries consider its likes over traditional currency.
As for the US, he argues that if crypto isn’t incorporated in the financial systems and isn’t used on a daily basis, then it will always, “remain an asset of speculation.”
When Lee was addressed about his feelings on altcoins remaining plateaued, with only Bitcoin seeing increases in its value, Tom Lee did express some concern. In particular, he argues that “while it does, it doesn’t”, because when Bitcoin rallies, the correlations of altcoins will drop.
This means that if Bitcoin managed to reach new heights, then investors would possibly take the profits made and invest in the altcoins (as opposed to USD), driving its market up. Ultimately, there is a domino effect.
Finally, when looking at the correlation between Bitcoin and the broader market, Lee noted that there is a high correlation in particular with the EM Equities because of its high risk. He also found that the S&P 500 and Bitcoin have a negative correlation. However, he argued that S&P’s big move implies a big move in crypto,
“So, I think a […] 2.5 standard deviation move for bitcoin would take it to $14,000. I’m not saying that’s where it’s going to go, but that’s the magnitude of move that would be a catch-up.”