Bitcoin is ‘Going to Fall’ if a Correction is Seen in Stocks, Says Fundstrat’s Tom Lee
He also called for more than 3x uptrend next year in Bitcoin price from the current levels.
$40,000 is the raised target price from Fundstrat’s Lead Digital Asset Strategist David Grider. This 50% upside from the current price levels estimate is based on institutional and corporate buying, regulatory de-risking, and retail stimulus.
These factors lead to an increase in positive momentum, which the team believes can continue over the next 6-12 months. However, Tom Lee, Fundstrat’s managing partner and the head of research, believes the digital asset can easily achieve 3x the price level. Lee on CNBC's “Fast Money” said,
“I think in rounder numbers, 2021 is going to be a lot like 2017, which means bitcoin should do even better in 2021 than it did in 2020 so something above 300%.”
Another 300% uptrend next will put BTC above $87,000 per BTC.
Weaker US dollar is part of the reason why Bitcoin is stronger, said Lee, explaining that for starters, Bitcoin is denominated in dollars and when USD goes down, BTC goes up. The USD Index has actually been hitting new 2020 lows, which are not seen since April 2018.
Tom Lee Fundstrat’s Head of Research
“The more important effect is this year we did see a lot of central bank liquidity, the dollar was really strong surprisingly for much of the year but its weakness now really is going to make people think – how do you sort of keep a unit in sound money.”
And while a lot of people thought gold would be that sort of store, for younger folks and those who are in the digital generation, Bitcoin is that digital asset that they want to hold as a store value, Lee added.
— Charlie Morris (@AtlasPulse) December 31, 2020
As for Bitcoin falling along with the gold and stock market during the March crash, Lee says it is because “Bitcoins’ holder base is still tiny.”
Only about a million real people own BTC compared to nearly a billion people that own other financial instruments, so it's a tiny penetration and Bitcoin acts like a risk-on asset, he said.
According to on-chain analyst Willy Woo, “Today ~2% of the world population has exposure,” to BTC. “Bitcoin has had 12yrs of capital inflows with minimal outflows, and a decade long span of doubling users every yr,” he added.
The adoption curve of Bitcoin is faster than any other global infrastructure rollout before it.
It's growing faster than the rollout of the Internet, mobile phones, and easily faster than "virtual banking" players like PayPal. pic.twitter.com/hrIywZnQn0
— Willy Woo (@woonomic) December 4, 2020
“I think if we have a correction in stocks then Bitcoin is going to fall and it's because a lot of the incremental buyers, if they're in the US may be using leverage or a risk appetite as a reason to add to Bitcoin so it should actually be falling if stocks fall.”