Tom Lee, Fundstrat’s CEO, one of the most important investment advising firm in the cryptosphere, has admitted that their predictions about the bitcoin price increase during the Consensus Conference this year were wrong. He admitted his flop on an interview with Bloomberg this morning.
Thomas Lee is the co-founder of Fundstrat, an advising strategy investment firm that has made a name of itself in the stock behavior prediction niche, and has become an important player in the cryptocurrency market price prediction. They have published several studies that deal with bitcoin price prediction and its possible relationship with mining hash rate.
But the flop that Tom Lee admitted was related with the most important blockchain conference that happened this week in New York: the Coindesk Consensus Conference. His firm predicted that the cryptocurrency market prices would increase significantly during and after the conference, based on previous behaviors. But the reality is vastly different than what they predicted.
Instead of a price increase, the market fumbled. Bitcoin and most altcoin prices fell and the total market cap shrunk 10%. Reality gave Fundstrat a lesson, teaching that you cannot predict future reactions only based on the effects of an event in the past. Still, Lee declared that their prediction was only logic and that this type of conference should cause their predicted behavior on the market. He said:
“GIVEN CONFERENCES LIKE CONSENSUS ARE CHANCES FOR THE COMMUNITY TO GATHER IN A CENTRALIZED PLACE AND MEET CONSTITUENTS NEW TO THE COMMUNITY, IT SEEMS NATURAL THAT THE COMBINATION OF ‘SANITY CHECK’ (ALL IS OK AND PROGRESS IS HAPPENING) PLUS ‘NEW INTEREST’ (INCREMENTAL ATTENDANCE) SHOULD STRENGTHEN THE CRYPTO-COMMUNITY’S CONVICTION,”
Then he goes to justify the price fall citing lack of institutional adoption and uncertainty in the regulatory framework. Indeed, the SEC (Securities and Exchange Commission) and the CFTC (Commodity Futures Trading Commission), the two independent government agencies that should regulate cryptocurrency have not even agreed on what cryptocurrencies are. He declared:
“CRYPTO STILL FACES SIGNIFICANT INTERNAL RESISTANCE AND HURDLES WITHIN TRADITIONAL FINANCIAL INSTITUTIONS,”
Lee has predicted that the price of bitcoin will reach $25.000 for the end of this year, and has also formulated a theory which makes a case for holding cryptocurrency to reach better profitability in the long run.