Money from speculative stocks will ‘eventually flow into crypto’: Fundstrat Global’s Tom Lee
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Never shy of a particularly bullish statement or prediction related to crypto, Wall Street stalwart and Fundstrat managing partner Tom Lee has a new one.
Speaking in New York on CNBC’s Crypto World show yesterday, the former JP Morgan chief equity strategist took a characteristically bullish stance on the crypto outlook for the remainder of this year. And that’s even in the face of likely US Federal Reserve rate hikes throwing a cloud of uncertainty over market movements.
“Interest rates look like they’re set to reverse almost 30 years of declines,” Lee acknowledged. “That means for the next 10 years, you’re guaranteed to lose money owning bonds… that’s almost $60 trillion of the $142 trillion [of US household net worth].”
“The question we ask ourselves is, ‘where’s the $60 trillion going to go to earn yield?’” Lee added. “The obvious thing is it rotates into stocks like FAANG, but I think what is more likely is a lot of speculative capital from equities… it’s really going to be tracing its roots to a rotation out of bonds and it’s going to eventually flow into crypto.”
Tom Lee’s Fundstrat Global is an independent research company that focuses on providing institutional investors and high-net-worth individuals with market strategies.
Lee himself is a noted Bitcoin bull and has made some pretty wild calls regarding the asset in the past. That includes a US$10 million BTC prediction (albeit within about two decades) he made at a 2018 crypto conference.
More recently, Lee was one of many crypto researchers and analysts, professional and otherwise, to have made an end-of-year US$100k Bitcoin call for 2021.
Obviously that didn’t happen, but Fundstrat did, however, successfully crystal ball it in a report about five years ago when they said that by 2022 Bitcoin could be worth between $15k and $50k.
Bang on, then. But, as the financial analyst mentioned to CNBC yesterday, “It’s tough to be too precise with crypto. It’s wide lanes… drawdown of 40 per cent are “really common.”
Anyone who’s been in crypto for more than a few months or two, ought to be well aware of that by now.
On the other hand, “Bitcoin makes most of its gains in 10 days in any single year,” said Lee, who told trading education platform MarketRebellion recently that his Bitcoin target for 2022 is in the US$200k range.
Doubling down, eh? What could possibly go wrong?