Bitcoin Price Catalyst: Fundstrat's Tom Lee Predicts Potential 350% Surge in Next Nine Months

Tom Lee, the managing partner of Fundstrat Global Advisors, has made a bold prediction about Bitcoin (BTC), stating that the cryptocurrency could potentially reach six figures before the halving event scheduled for 2024.

According to a research note by Lee, the approval of a spot Bitcoin exchange-traded fund (ETF) could have a significant impact on BTC's price, potentially driving it to surge between $140,000 and $180,000 by April next year.

This projection suggests an impressive increase of 380% to 516% from current levels.

The prediction is based on Fundstrat's head of crypto strategy, Sean Farrell's thesis, which indicates that a spot Bitcoin ETF approval would lead to a five-fold increase in daily demand for Bitcoin.

Currently, the Bitcoin market experiences a balance with $25 million in daily block rewards and $25 million in daily demand.

Sean Farrell believes that ETF demand could reach $25 billion in the first year, translating to $100 million in daily demand, which would bring the daily demand for Bitcoin to $125 million, while the daily supply remains at $25 million. As per equilibrium analysis, the implied clearing price would need to rise to match daily supply with daily demand, potentially reaching $140,000 to $180,000 before the April 2024 halving event.

Lee and Farrell's idea of a higher equilibrium price is consistent, with Farrell estimating a flow multiplier for Bitcoin of 4X-5X.

Regarding the likelihood of a spot Bitcoin ETF approval in the US, Lee believes it could finally happen, attributing this possibility to the "BlackRock effect." BlackRock, the world's largest investment firm, recently filed a spot Bitcoin ETF application, increasing the chances of approval.

At the time of writing, Bitcoin is trading at $29,191.

Jul 27, 2023

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