Bitcoin a digital currency created in 2009 by a mysterious Satoshi Nakamoto has come a long way. It is successful because of lower transaction fee as compared to traditional online payments.
Mr. Tom Lee, co-founder of Fundstrat Global Advisors and one of the biggest Bitcoin bull predicted that crypto currency could double or may even triple in 2018.
In August 2017, Mr. Tom Lee predicted that by the year end (2017) Bitcoin will cross $10,000 mark. Bitcoin rallied much higher than Mr. Lee’s prediction. It hovered above $19,000 in December, almost double than the prediction. It has left stock much behind in its performance.
After touching a high of $19,800 Bitcoin has fallen by 25 percent. Stocks, gold, and oil were also up by 3%, 5% and 10% respectively during that period.
Bitcoin has taken a substantial beating from its high but Mr. Lee is very bullish on Bitcoin in 2018.
Looking at records of options and futures Bitcoin is trading high. It is a clear sign by traders that they expect the digital currency to soar more than 200 percent by the year end.
Mr. Lee believes Bitcoin is easily going to outperform stock indices on a risk-adjusted basis. He further elaborated that in a long-term Bitcoin can be a replacement for gold or store of value. Once the investors discover and generate income they will replace gold with Bitcoin.
Bitcoin boom is eating up into the share of the gold market. A continuous and huge surge in Bitcoin value will decrease gold holding, especially among youngsters. The gold market is huge at present. If Bitcoin gets even 5% share of the gold market it will be a huge amount and this will move Bitcoin to 200 percent from where it is currently trading.
Mr. Lee says that if Bitcoin rises to $20,000 level by mid-2018, the second half will see a bigger move. Hence he feels Bitcoin should be owned for a year.