Commodity Blog

Commodity news, technical and fundamental analysis, market data on precious metals, energies, industrial metals, and soft commodities

Archives

Bitcoin Price Will Drop 50% – Analyst Tom Lee Predicts

January 10, 2021 at 20:16 by Mark Stevenson

Well-known cryptocurrency analyst and investor Tom Lee, who predicted the growth of Bitcoin (BTC) to $40,000, is confident that the coin will soon be corrected by 50%.

Tom Lee expects an increase in Bitcoin volatility

In February last year, Lee predicted an increase in the value of Bitcoin to $40,000. In the first week of January 2021, the cryptocurrency really reached a record high, exceeding $41,000. Along with the rise in the value of bitcoin, the volatility of the asset has sharply increased.

In a recent interview, Tom Lee admitted that in the near future, the price of Bitcoin may fall by 50% due to high volatility, and investors should be prepared for such a correction.

Also, the co-founder of Fundstrat Global Advisors claims that the fall in the value of bitcoin may be influenced by the explosive growth of shares, which is likely to occur at the end of January. During the same period, the cryptocurrency market can seriously sink.

Lee said in an interview with Yahoo Finance Live:

Bitcoin is a hypervolatile asset. Our outlook for risky assets is this: stocks will show explosive growth and peak sometime in late January or April, while the S&P will reach the 4000 area, after which a deep drawdown will begin. If the S&P falls 10%, then Bitcoin will go down 40% -50%.

The expert is sure that such a correction is the norm for the cryptocurrency market. A similar situation was already observed in 2017 when the cryptocurrency increased by 1200%, and then collapsed sharply. Moreover, a correction is even necessary, so investors will get new attractive entry points.

Lee added:

If the situation develops according to the 2017 scenario, Bitcoin will grow by at least 300%. Of course, growth will not be straightforward. We are in for ups and downs, but at the end of the year, Bitcoin will cost much higher.

The decline in the price of Bitcoin is also predicted by analysts at Flipside Crypto. At the moment, 95% of all bitcoins are stored on 2% of addresses, so if the whales are gearing up to sell, a couple of large trades will be enough to trigger a massive correction.

At around 20:07 GMT, Bitcoin price was trading at $37,086, down 8.05% in the last 24 hours.

Millennials will raise Bitcoin price to sky-high rates

At the moment, the main driving force behind Bitcoin is large and institutional investors who buy bitcoins en masse in the hope of protecting their own finances from inflation, as well as increasing their savings. In recent times, several large corporations announced their plans to buy Bitcoin at once. For example, the investment company GreenPro Capital intends to purchase Bitcoin in the amount of $100 million.

And after private investment funds, institutional investors in the United States have begun thinking about buying Bitcoin. In an interview with Bloomberg, the head of the investment firm Grayscale Investments, Michael Sonnenshine said US pension funds will be the next major buyers of Bitcoin.

Bitcoin price has not yet reached its peak

Several analysts believe that Bitcoin has not yet reached its peak price. They believe that BTC will receive a powerful boost after millennials come to the market and start investing billions of dollars in cryptocurrencies.

I think for the younger, digital generation, Bitcoin is the digital asset that they will use as a store of value,” said Tomi Lee.

A similar opinion was voiced by Grayscale analysts. They are confident that over the next 25 years, $68 trillion will pass from the older generation to the young, and investment capital will begin to flow into uncorrelated assets such as Bitcoin.

Read also: Will Bitcoin Price Rally to $146,000? JPMorgan Thinks So

The survey showed that millennials are much more likely to buy, hold, and use Bitcoin, but most of them have not yet reached their peak of careers. When this happens, the price of one bitcoin may exceed $500K.

If you have any questions and comments on Bitcoin today, use the form below to reply.

Leave a Reply

required
required  

Navigation

Menu