bitseven.com - Over the past several weeks, the bitcoin price has been uncharacteristically stable, even as equities have lost their footing and the global stock market has flirted with corrective territory.
Tom Lee, the founder of Fundstrat Global Advisors and one of Wall Street’s most well-known bitcoin bulls, said that he was pleasantly surprised by the drop in crypto volatility, particularly when juxtaposed with the stock market’s recent swings.
He told CNBC:
“It’s surprising given how small bitcoin is in terms of market cap. The total crypto market cap is $200 billion, on close to $90 trillion of global assets that have actually seen a correction…so I’m pleasantly surprised.”
That stability has come in the face of significant headwinds, not just from general trends in equities markets but also from a strengthening US dollar, which affects crypto since prices are still predominantly denominated in USD.
Lee, who had at one point predicted that the bitcoin price could crack $25,000 this year, said that BTC appears to have found a floor at $6,000, as it has tested that mark several times throughout the year and ultimately held above it.
The market has yet to see the level of fiat inflows necessary to jolt the flagship cryptocurrency out of its 10-month long rut, but Lee believes that could change — potentially even before the end of the year — as major financial industry players such as Bakkt, Fidelity, and ErisX begin to roll out crypto services for institutional investors.
Cryptocurrency prices could also benefit from improved conditions in equities and currency markets. One thing to watch for is increased stability in emerging markets, which have been highly volatile and, according to Lee, “severely oversold.” Another factor that would bolster bitcoin’s prospects would be a reversal in USD’s strengthening trendline. These improved conditions, along with institutional inflows, should be sufficient to catalyze the foundations of the next crypto market rally.
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