Bitcoin expert Tom Lee has said he believes the year-end price of bitcoin will be $15,000, cut from the £25,000 target set earlier in the year.
Despite nose-diving prices, Mr Lee said bitcoin is likely to pick up if there is mass adoption of the cryptocurrency.
The Wall Street strategist told CNBC on Tuesday: “There’s a few things that could happen that could drive that. But this past few days has definitely been a negative development because we are talking about breaking to the downside of momentum.”
When asked what the “true downside” of bitcoin is, Mr Lee said: “I think that technicals, especially in a bear market, mean that price levels can retrace beyond like what you think are fair value.”
He added: “I think that digital assets are going to be relevant in a world where growth is increasingly digital.
“So, to me, bitcoin is a real bet on a project where we have 50 million wallets. There is 5 billion visa cards. So, I think the runway is really adoption in the future.”
On Monday, bitcoin was down about 21 percent on November’s high and around 70 percent down on its January 6 peak of $17,300.
The cryptocurrency expert explained the recent decline and said: “I think Bitcoin is not necessarily a value asset. So, as growth, stocks and tech and FAANG kind of come under pressure it is going to hurt bitcoin.”
He added: “Do I think bitcoin as a long-term fundamental story is broken? I don’t think so. I mean, price at the moment isn’t confirming fundamentals.”
Bitcoin price decreased to $4,412.33 at 17:15 (GMT) on Wednesday, according to CoinDesk. It saw its highest value before Christmas when it reached the monumental price of just under $20,000.
Other cryptocurrencies have also declined, with the BTC’s rivals including Ether, Litecoin and XRP also joining in the slump.
This means digital assets have lost close to $700billion of market value since January.
The drop in bitcoin’s market performance marks the lowest BTC price since October 18, 2017.
Neil Wilson, the chief market analyst at Markets.com said: “The crypto bloodbath continues.
“Things looks like they only get worse from here. Where is the incentive to buy? It does rather look like the bottom is coming out of this market.”
The cryptocurrency has faced criticism by banks and finance experts, with Banking giant Morgan Stanley likening the current market climate of bitcoin to the dot-com bubble that, during its most “exuberant” period rose by 250 to 280 percent.
Morgan Stanley strategist, Sheena Shah, stated that the similar behaviour between dot-com and Bitcoin could mean history is repeating itself and the cryptocurrency could soon crash.
Bank of England Governor Mark Carney also this year said it is a “privilege” to be part of the financial system and “responsibilities come with those privileges”.
Mr Carney added: “The best of the cryptocurrencies, I would suggest, will gravitate to the best of the exchanges if they were regulated. And others will fall by the wayside.
“In the end, it is not just about market regulation, part of this is about any money laundering, terrorism financing, other elicit activities.”
Published at Wed, 21 Nov 2018 19:40:00 +0000