Tom Lee told CNBC’s Fast Money recently that it is his prediction that we could see a new high for both Bitcoin and the S&P 500. He is basing his prediction on the historical ties between Bitcoin and the equity market.
Tom Lee is a known bull in the cryptocurrency space. Based on his predictions for the stock market, we could see Bitcoin break an all-time high shortly. Yet, as Lee says, it all depends on how the S&P 500 performs.
Bitcoin Tends to Follow the S&P500, Says Lee
“The next big catalyst [for Bitcoin] is a decisive breakout in the equity markets,” he told CNBC’s Fast Money on Thursday. “Once equities break to an all-time high, Bitcoin becomes a risk-on asset.” For Lee, it seems clear: as stocks go high, Bitcoin follows. The increased liquidity from a breakout in the equities market could propel Bitcoin to an all-time high, predicts Lee. As of now, the S&P’s all-time high is around 3,025. If it breaks this, Lee argues that it would be “bullish for Bitcoin.” His analysis is based on precedent: the best years for the S&P 500 have also coincided with the best years for Bitcoin. The recent lull in Bitcoin’s price movements can also be explained in this way. Lee sees this same choppy market in equities also, which leads him to believe that the S&P 500 needs to move upward for Bitcoin to follow.
A Golden Opportunity?
During this same segment, BKCM founder and CEO Brian Kelly told Fast Money that this is a “massive buying opportunity” for those looking to jump into Bitcoin since there is “too much money coming into this market.” He argues that “for the next six months” there is the opportunity for a ‘generational buy.’ However, there is a flip side to what Lee is saying well. Since Bitcoin tends to mirror the S&P 500, could it also be the case that during a recession it would crash harder? The leading cryptocurrency has never experienced a recession before, so there is room for speculation. However, with the halving set to happen around May 2020 and Bakkt’s launch on Sept 23, we could soon see the perfect storm for Bitcoin in the year to come. Do you agree with Lee’s assessment? Let us know your thoughts in the comments down below.Images are courtesy of Shutterstock.
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Advertorial is the universal author name for all the sponsored content provided by BeInCrypto partners. Therefore, these articles, created by third parties for promotional purposes, may not align with BeInCrypto views or opinion. Although we make efforts to verify the credibility of featured projects, these pieces are intended for advertising and should not be regarded as financial advice. Readers are encouraged to conduct independent research (DYOR) and exercise caution. Decisions based on...
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