- Bitcoin drops by 3% on Thursday
- Other cryptocurrencies follow in its footsteps
- Tom Lee says his target of $25,000 for the end of 2018 remains in place
Bitcoin and most other cryptocurrencies dropped yesterday, with Bitcoin ending 3% lower.
Just after 3pm ET yesterday afternoon, Bitcoin was trading at $6,467.01. This is still significantly higher than last week’s lowest level of $5,799.62
It’s difficult to pinpoint a single driver that could trigger such a sharp sell-off in the cryptocurrency. Regulatory scrutiny and security breaches in digital currency trading systems have negatively affected these currencies after Bitcoin’s price went up by well over 1,000% in 2017.
Bitcoin Cash, the cryptocurrency’s offshoot, dropped by 6.9% to $719.89. Litecoin dropped by 5.3% to $82.16, and Ethereum lost 2.78% of its value to reach $460.37.
Tom Lee, the sole Wall Street analyst who still believes that Bitcoin will strongly recover this year, said on CNBC’s Squawk Box that he expects it to end 2018 at $20,000. That, however, is lower than his initial projection of $25,000.
Speaking on CNBC’s Fast Money, he later clarified his stance, saying that he might have misspoken earlier. He added: “What I was trying to illustrate was that given where mining costs will be and applying the historical average of 2.5 times mining costs, that would imply fair value over $20,000, roughly $22,000.”
He confirmed that he still believed bitcoin can reach close to $25,000 by the end of 2018
Lee emphasized that Bitcoin investors shouldn’t unduly focus on a couple thousand dollars; any return that is even close to $20,000 would mean a 200% price increase from current levels.
Its current price brings Bitcoin back to its April lows, which marked the free-fall from close to $20,000 at the end of last year. In May, it recovered to $9,800, but it has dropped by more than 30% since then.
