Tom Lee’s three reasons for a soaring of Bitcoin price
On May 23th, Tom Lee, the co-founder of Fundstrat, said to CNBC in a email that the Bitcoin price will reach $25,000 for three reasons.However, before we really look into the reasons, it’s necessary for us to get a glimpse at the current price graph showing the data and how the Bitcoin price change.
According to data from citicoins.com, the current price of Bitcoin stands at $7,449.36, far much lower than the so-called $25,000, and the curve seems rather volatile, with the high stood at more than $9,600, almost hitting the mark of $10,000 and the low at less than $7,500. It also shows a trend that the price curve will change within a lower price range.
Therefore, why does Tom Lee still holds euphoria about a increase in the Bitcoin value under such a dim situation?
1. Mining Bitcoin still be profitable
As we all known, the mechanism for people to get tokens in Bitcoin system is mining. Miners compete with others users in the world for processing transaction information in a way of competing computing power. To mine Bitcoin, you first need the equipment and then you pay the bill. However, as the difficulty increases exponentially, more advanced equipment is needed and the cost of paying a electricity bill goes higher and higher. Therefore, someone claimed that mining Bitcoin is not that profitable as before.
While according to Tom Lee, the current cost of mining a Bitcoin is about $6000, compared that current price’s $7,449.36. Therefore, miners who participate in processing information could get more than $1400 out of the activity.
2. Institution is piling in, bring in possible increase in price
News coverage like Goldman Sachs to launch Bitcoin futures and Facebook to get into cryto market is the demonstration of an increasing interest within large institution toward crytocurrency. Then the entrance of some powerful and reliable institution may help mitigate people concerns about the tokens and that is sure to bring dramatic change within the market.
"I think institutional investors have gained a lot of interest, and they haven't really come into crypto yet because there is still some regulatory uncertainty. But that sort of ultimate allocation into crypto as an asset class is going to be a powerful reason why Bitcoin rallies." said Tom Lee.
3. A historical trend for going up
According to the data from the 10-day performance of Bitcoin price, there is a possible move from $8,000 to $25,000. And earlier this month, an research of Fundstrat revealed that BTC price will stand at $36,000 in 2019 based on historical averages. There is also an prediction of cryptocurrency value ranges between $20,000 and $64,000 by the end of 2019.