Fundstrat’s Tom Lee predicts that the Bitcoin price can potentially double this year, giving five solid reasons to back it up.
Fundstrat’s Tom Lee was the main highlight of last week’s Blockchain Economy 2020 event in Istanbul, Turkey. Taking the stage on day two, Lee addressed a crypto-savvy audience for about half an hour.
Before delving into why Bitcoin (BTC) would see a price hike this year, Lee started his speech with a nod to the famous comparison between the internet and blockchain:
“The most important generational trade over the next twenty years is going to stand around the disruption of the financial industry. And the most important of these technologies are going to be blockchain and crypto.”
Those two topics are here to stay, but picking winners and losers is still very difficult, he noted.
Nevertheless, 2020 will be a good year for Bitcoin’s price, according to Lee. During his keynote, he repeatedly said that the crypto community should be very optimistic in 2020, “as we are now in a proven start of a bull market.” Lee went on to add:
“Bitcoin is the single most performing asset of 2019. It beat the return of the S&P 500, which was the best in almost 25 years.”
The stock market in the United States had its best year in almost an entire generation, and yet Bitcoin tripled that return. On top of that, 2019 was the fourth-worst year in the history of Bitcoin, he added. Lee then listed five reasons why Bitcoin is up for a bull market in 2020.
2020 U.S. elections
Political pressure against Bitcoin is going to be a lot lower in the United States. While Washington essentially killed the Bitcoin rally last year, 2020 elections are going to shift politicians’ focus away, which is good for crypto, Lee explained.
The Bitcoin halving
The most important factor impacting Bitcoin’s price is the halving, according to Lee. “I know there’s controversy — people wonder if Bitcoin halving is going to affect the BTC price. We think it’s going to have a significant effect.”
Related: Half of Predictions Are Right Half the Time — BTC’s Halving Divides Opinions
Backed with a slide from his presentation, Lee noted that demand for Bitcoin in 2020 would probably be higher than it was last year, while supply will drop due to the halving. This imbalance between supply and demand caused by the halving might result in an increase of nearly $100 billion in Bitcoin’s network value, Lee said.
“Bitcoin price is around $10K now, and if this [Bitcoin halving] is going to play out like the other halving periods, there’s a good argument that Bitcoin makes an all-time high this year.”
U.S.–Iran geopolitical tensions
2020 started with strife brewing between the U.S. and Iran, which will affect the Bitcoin price for the rest of the year. Geopolitical risks increase demand for safe haven assets like Bitcoin, Lee argued.
200-day moving average
In January, Bitcoin moved back above its 200-day moving average. “When an asset trades above its 200-day moving average,” explained Lee, “It’s considered to be in a bull market trend. This is especially true for Bitcoin.” The numbers are confirming that this looks a lot like 2012, he added.
“I think there’s even a chance that Bitcoin could end, or touch the level of, somewhere around $30,000 this year.”
Coronavirus spread
Resonating with almost half the crypto industry, Lee believes “the risk of a pandemic such as coronavirus is increasing the demand for Bitcoin and other safe-haven assets.”
Bitcoin to beat Dow Jones?
Lee recently predicted that Bitcoin is going to reach 40,000 points before Dow Jones does, after the latter beat BTC to 30,000, as Cointelegraph reported on Feb. 11. Lee also believes the 200-day moving average is a strong implication for an all-time high by summer 2020.
