Thomas Lee, one of Wall Street’s most renowned analysts and co-founder of Fundstrat Global Advisors, is confident that the crypto ecosystem will quickly return to prominence despite a lackluster performance in 2022.
Lee, who recently appeared in an interview with CNBC, said the downtrend currently hitting the crypto market is nothing new. The blockchain industry has experienced similar periods before, most notably in 2018 when Bitcoin lost more than 70% of its value compared to its previous all-time high.
“The past year has been catastrophic for the crypto sector. Hardly anyone made money from cryptocurrencies in 2022, but that’s not much different from the pattern of 2018. If we look closely at the previous crypto winter, we can see that Bitcoin went from $17,000 to almost $1,200, and then the best projects were still in the design phase. »
Lee adds that the current market downturn is an important moment for the industry as it will clean up the industry by kicking out some players that are detrimental to the ecosystem. He also stressed that cryptocurrencies are far from ancient history. Thomas Lee is indeed convinced that the crypto market has the necessary characteristics to stay ahead in the coming years.
When asked if he still recommends buying Bitcoin, Lee says yes and says he started writing in early 2017. At the time, Thomas Lee recommended that investors put at least 1% of their money in Bitcoin. Note that Bitcoin’s price was below $1,000 at the time and this stake would now represent 40% of their portfolio without rebalancing.
Thomas Lee remains bullish on Bitcoin
When Thomas Lee’s company, Fundstrat Global Advisors, released its first Bitcoin reports in 2017, the company predicted a price range between $15,000 and $50,000 by 2022.
As we have seen, this prediction has been largely confirmed, with Bitcoin trading around $50,000 at the start of the year and falling to $16,000 in recent days following the fall of FTX, which until recently was the third most important platform in the crypto ecosystem.
In February, Thomas Lee shared even more optimistic predictions about Bitcoin, stating that the ecosystem’s main cryptocurrency could rise to $200,000 in the coming years.
At this very moment, he indicated that interest rates would make government bond holders lose money in the more or less near future. Thus, many US investors are likely to allocate their capital to alternative assets such as cryptocurrencies, for example. As a result, he believes it is quite possible and reasonable to expect a price of $200,000 for Bitcoin within a few years.
“The biggest problem the crypto sector could face would be a flaw in Bitcoin being discovered as it is currently the most important blockchain in the ecosystem. »