As the tensions amidst many players in the crypto market are getting high, the crypto winter is likely to subside with the exponential growth of crypto leader Bitcoin. Bitcoin perma-bull Tom Lee of Fundstrat attempted to paint a rosy picture of a potential price rally of Bitcoin in the near future.
Lee tweeted on March 17 that the “tailwinds” that had made Bitcoin be down during the crypto winter, situations are easing now. Lee claims that “macro factors such as a rally in risk assets plus the US dollar no longer surging are tailwinds for BTC.”
As per his claim, a plunge in the emerging market had forced the crypto-coin to possess a downward growth. However, a correlation between bitcoin’s performance and emerging market is yet to be established. He also noted that the recent increase in the S&P 500 and small-cap stocks are bigger than the two standard deviations. He also suggested the actual price of bitcoin would rise to $10,000 to $20,000 if Bitcoin is to be caught up with the range of equities.
He tweeted, “CRYPTO (2/2): the natural question is how much-implied upside #bitcoin to “catch up” to macro.
S&P 500+small-cap rally since 12/24 is >2 std dev.
1-std dev for $BTC is +185% gain. “Catching up” to equities implies $10k-$20k.
NOT OUR BASE CASE. Just highlighting macro tailwind.”
In the meantime, experts believe that there is no definite correlation between bitcoin’s price movements and the broader stock market. And at this moment, there are few in the industry who takes bitcoin price predictions from anyone seriously, as the experts have been proven wrong amid the 2018 market crash.
However, there is no denying that Tom Lee had been wronged many times in the past. In 2018, he had predicted of a rally in Bitcoin prices after the tax season attributing the potential rally to the drop in bitcoin’s price to mass sell-offs caused by investors who were attempting to sell off their cryptocurrency holdings so that they can avoid paying taxes. And his predictions never fructified to be true.
The same year, Tom Lee’s colleague at Fundstrat, Robert Sluymer, who worked as the head of technical strategy predicted that the Bitcoin would rally soon as it had finally bottomed, and technical analysis said it would rise.
“We think bitcoin is starting to bottom off some very key support around $7,000,” Sluymer said. “And we think it’s going to start a recovery process here.” That rebound has never happened as well.
In the latter part of 2018, when the crypto market was at the lowest stage, Lee reportedly doubled his Bitcoin target to $15000. He then termed the crypto winter an “awkward transition” and said it would pass very soon.
These unreliable price predictions have made many in the industry to laugh off his predictions. When Lee insisted last week that a bull mark is around the corner, many in the crypto market started to mock him. One investor on Twitter said, “Is this the same Tom Lee that predicted Bitcoin to be $25,000 by the end of 2018? Tom, you don’t have credibility in this space any longer.”