Tom Lee, a well-known Wall Street bull and managing partner of Fundstrat Global Advisors, remains optimistic about the potential of Bitcoin, predicting that the price of Bitcoin could reach $150,000 by the end of this year. Although the price of Bitcoin has recently hovered between $60,000 and $70,000, Lee believes that the approval of a Bitcoin spot ETF and the resolution of Mt. Gox's distribution issues will drive a significant increase in prices.
Part of the reason for Bitcoin's recent weakness is people's concerns about Mt. Gox's distribution issues. Mt. Gox, the former largest Bitcoin exchange, was hacked in 2014 and lost 850,000 Bitcoins. After a decade-long bankruptcy process, Mt. Gox's trustee announced that it would distribute 142,000 BTC and 143,000 BCH to creditors starting in July, and it is expected to be completed in October.
Investors are concerned that creditors who have been waiting for more than a decade may sell their Bitcoin soon after receiving it, which could lead to a market sell-off.
Tom Lee's analysis: Bitcoin may be affected by Mt. Gox's distribution starting in July, which has been a huge concern for many years. If I invest in cryptocurrencies, knowing that one of the biggest concerns will disappear in July, I think this is actually a reason to expect a sharp rebound in the second half of the year, so I think $150,000 is still possible this year.
Alex Thorn, head of research at Galaxy Digital, said the impact may not be as severe as expected. According to Thorn, about 75% of creditors chose to repay early and accept a 10% reduction, which means that only about 95,000 BTC will be used for early payment, and the rest will be distributed over a longer period of time.
Despite these concerns, historical trends and investor sentiment remain positive.
CNBC emphasizes that Bitcoin usually experiences significant price increases in a short period of time each year. According to Lee, most of Bitcoin's annual gains occurred in just 10 days. Excluding these best-performing days would result in a negative annual return, which emphasizes the importance of investors seizing market timing.
Bitcoin’s fourth halving takes place in April, which is another factor contributing to the bullish outlook. Historically, Bitcoin tends to hit new all-time highs about 18 months after the halving event. This pattern supports Lee’s prediction of a significant price increase before the end of the year.
Since mid-June, the market has been excited about BlackRock’s application for a Bitcoin spot ETF. The move pushed Bitcoin past the $30,000 mark, and market participants are optimistic that BlackRock has a high chance of getting approval. If this ETF is approved, it is expected to inject a lot of money into the Bitcoin market.
Fundstrat Global Advisors, led by Tom Lee, recently released a report highlighting the potential impact of a Bitcoin spot ETF on the market. Currently, the daily demand and mining reward balance of Bitcoin is around $25 million. However, the introduction of a spot ETF could significantly change this balance.
According to the report, if the spot ETF is approved, it could generate $125 million in daily demand. This massive increase in demand compared to the current $25 million supply per day could lead to a significant increase in Bitcoin prices. Fundstrat predicts that the liquidation price of Bitcoin could be between $140,000 and $180,000 before the halving in April 2024.
Standard Chartered Bank has a similarly optimistic view, but with a slightly different timeline. Their analysts expect that Bitcoin's price could reach $120,000 by 2025, thanks to miners holding newly minted Bitcoin in the medium term.
Meanwhile, Bloomberg ETF analysts Athanasios Psarofagis and James Seyffart also gave optimistic predictions. Based on the success of the Canadian Bitcoin Spot ETF, they estimate that the US Bitcoin Spot ETF could accumulate $54 billion over time.
The expectation of a Bitcoin Spot ETF and the recovery of the overall market have benefited Bitcoin mining companies greatly. Many institutions have entered the market, and related stocks have also achieved considerable gains.
As of June 2023, the stock prices of the top nine publicly traded Bitcoin mining companies have risen an average of 257.14%, outperforming Bitcoin itself.
Source: Cointelegraph
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