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Tom Lee: “Bitcoin can reach $25,000 by the end of the year”
Editorial Team

Tom Lee had previously made a prediction that Bitcoin would hit a new all-time high of $25,000 by the end of 2018. Yesterday, he was scaling back his expectations but only slightly.

The co-founder of Fundstrat Global Advisor told CNBC’s “Squawk Box”:

“Bitcoin has historically traded at 2.5 times its mining costs. It’s not out of the question that it could be over $20,000 by the end of the year at fair value.”

Nevertheless, he later elaborated on the network’s “Fast Money” that he “may have misspoken a little bit.” He stated:

“What I was trying to illustrate was that given where mining costs will be and applying the historical average of 2.5 times mining costs, that would imply fair value over $20,000, roughly $22,000. We still think bitcoin can reach $25,000 by the end of the year or something like that.”

Lee maintains on his prediction which is based on the break-even cost of Bitcoin mining. “The reason bitcoin looks really good here is the cost of mining around $7,000 fully loaded,” he stated, “And the difficulty is rising. So by the end of the year, it’s going to be $9,000.”

It is worth mentioning that Lee has been wrong with his predictions before – particularly when he called for a massive rally after the May’s high-profile Consensus conference.

Last month, he told Bloomberg that Bitcoin’s dramatic and sustained price declines in 2018 have been the result of futures contracts expiring – noting then that there had been six expirations of futures contracts since the CBOE launched Bitcoin futures back in December. According to him, it is possible to see a decline of around 18 percent in 10 days before the expiration of the future contracts with prices generally recovering in the following six days.