In a bold prediction, Tom Lee, the well-known Bitcoin bull and co-founder of Fundstrat Global Advisors, forecasted that the approval of a spot Bitcoin exchange-traded fund (ETF) in the United States could propel the price of the flagship cryptocurrency to over $150,000.
During an interview with CNBC’s Squawk Box, Lee expressed his belief that a succession of approved Bitcoin spot ETFs would reshuffle the dynamics of Bitcoin’s supply and demand, leading to significant price appreciation.
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Lee emphasized that the imminent approval of these investment instruments would virtually propel BTC’s price to reach $150,000 or higher prices like $180,000. He credited Fundstrat’s crypto digital strategist for determining the clearing price, which stands at the staggering figure of over $150,000.
Tom Lee noted:
“If the spot Bitcoin [ETF] gets approved, I think the demand will be greater than the daily supply of Bitcoin. So the clearing price — this is done by our crypto digital strategist — is over $150,000. It could even be like $180,000.”
Several major players in traditional finance, including Fidelity, Invesco, Wisdom Tree, ARK Invest, and Valkyrie, have followed in the footsteps of BlackRock, the world’s largest asset manager, and submitted applications for physically-backed Bitcoin ETFs with the SEC.
Although the SEC recently halted Cathie Wood’s ARK 21Shares application, the growing global traction of Bitcoin ETFs highlights their increasing significance within the cryptocurrency sector. However, Lee believes that an endorsement by U.S. regulators would mark a significant milestone, further cementing the mainstream acceptance of these investment vehicles.
The Relationship Between Bitcoin and Economic Conditions
Lee also noted the interplay between cryptocurrencies and the broader economic landscape. He argued that the stabilization of interest rates would lead to more accommodating financial conditions, potentially resulting in increased volatility for riskier assets like Bitcoin (BTC). Thus, even if a spot Bitcoin ETF fails to secure approval, Lee remains confident in Bitcoin’s upside potential due to the upcoming halving event.
The scheduled halving event, slated for April 26, 2024, occurs approximately every four years and reduces the Bitcoin miners’ rewards by 50%, effectively regulating the supply economics of the blockchain.
The next Bitcoin halving is expected to decrease the reward per block from the current 6.25 BTC to 3.125 BTC. Lee asserted that this reduction in supply will compel the clearing price to rise, although it may not reach six figures.
Interestingly, other experts also anticipate a swift ascent of Bitcoin, with Blockstream CEO Adam Back recently betting that the cryptocurrency will hit the $100,000 mark just before the halving, a date that is potentially closer than many anticipate.
Even with the possibility of a spot Bitcoin ETF approval and the upcoming halving event, the future trajectory of Bitcoin (BTC) price still remains uncertain. However, Tom Lee’s bullish expectations, supported by his analysis of supply-demand dynamics and the correlation with economic conditions, give enthusiasts and investors much to anticipate in the coming years.
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