Tom Lee, head of research at Fundstrat Global Advisors, told Bloomberg that in his opinion, the 30% drop in the price of Bitcoin just before Christmas was actually very healthy.
“Well, I don’t think that anyone should be surprised if Bitcoin is pulling back given it’s nearly tripled in the last six weeks, so I would say it’s very healthy, otherwise we’d be staring at a parabola that’s gaining in acceleration, right? It would just mean that by the end of next year we’d be having to do log functions on the price,” he told Jonathan Ferro on the segment Bloomberg Daybreak: Americas.
The price of Bitcoin fell to a low of about $12,000 on the 22nd of December, causing some concern amongst investors. But considering that we are talking about a widely held asset losing value in the tens of percent, people were not as concerned as one might expect.
Bitcoin has "crashed" 30% SIX TIMES in 2017. Each "crash" has been followed by an increase of: 76%, 237%, 183%, 165%, 152%. Bitcoin takes 7 steps forward, 2 steps back, 7 steps forward, 2 steps back. Every 2 steps back is heralded as the end of bitcoin. Relax!
This happened this time too – Fortune reported on the 23rd that the price rebounded by over 40%.
Lee said that the dramatic rise in price is simply a reflection of network value – this is an asset/payment system still finding its place in the world, with price rising rapidly as first-time use spreads.
Given this, price corrections should be (and have been) expected: “If anyone says that Bitcoin is trading on pure speculation, they haven’t done their work,” said Lee.
Regarding the bubble question, he pointed out that only a minority of financial institutions hold Bitcoin, and asked: “How can something be deemed a bubble, [if it’s] only held by a few?”
Source: Finance Magnates
Jr Trader Alexander Kumanov
Read more:
25 Canada Square, Level 33, office 50, Canary Wharf London, E14 5LQ +44 20 3608 6256
World Financial Markets - 0700 17 600 Varchev Exchange - 0700 115 44
Varchev Finance Ltd is registered in the FCA (FINANCIAL CONDUCT AUTHORITY) with a passport in the United Kingdom: FCA, United Kingdom - registration number: 494 045, which allows provision of financial services in the United Kingdom.
Varchev Finance Ltd strictly comply with the statutes of the European directive MiFID (Markets in Financial Instruments). targeting increased efficiency, transparency and uniformity of financial instruments.
Varchev Finance Ltd is authorized and regulated by the Financial Supervision Commission - Sofia, Bulgaria: License number RG-03-02-05 / 15.03.2006
The information on this site is not intended for distribution or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
Disclaimer:
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 63,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.