Tom Lee, managing partner at Fundstrat Global Advisors, has revealed he is still confident in bitcoin’s price performance this year, despite Elon Musk’s reversal on the flagship cryptocurrency and the recent correction.
Speaking to Insider, Lee revealed he doesn’t think Musk’s reversal is going to “get people negative on bitcoin,” but is instead going to get them to “focus on the problems that are being created by digital assets.”
He added it’s “probably better to view it as a call to action for the bitcoin industry to focus on renewables or more efficient ways to provide proof of work.” Tesla CEO Elon Musk, as CryptoGlobe reported, announced earlier this week Tesla would no longer be accepting bitcoin payments for electric vehicles over environmental concerns.
The company started accepting bitcoin back in February, at about the same time it revealed a $1.5 billion investment in the cryptocurrency. Musk’s announcement negatively affected the cryptocurrency market, even though the firm said it would not sell its BTC holdings.
Later on, Musk seemingly implied Tesla was going to be selling its bitcoin, and the price of most cryptoassets kept on dropping. The CEO then clarified Tesla has not sold bitcoin yet.
Lee is, however, confident the market will move past Musk’s comments and a potential bitcoin sale from Tesla, and even upgraded his $100,000 bitcoin price prediction for this year to $125,000. He added he understands Musk’s decision to drop bitcoin as a payment method as it would have been “tough to accept” the cryptocurrency because of its volatility.
To the strategist, the ideal way for Tesla to use bitcoin would be if it transacted it the same day, and not if it allows customers to pay for cars with it, as its value could drop before the vehicle is delivered. As to why Musk changed his stance on bitcoin, Lee assumed someone within his organization influenced him.
Per his words, many are concerned about environmental, social, and governance metrics. To Lee, some of those concerned argued that if Tesla is to accept a digital currency it should not be bitcoin but instead a greener alternative.
Cryptocurrencies using a Proof-of-Stake (PoS) consensus mechanism including Waves, ADA, XTZ, and others saw their prices surge after Tesla’s announcement. Musk may, however, be considering Dogecoin as the CEO said he is “working with Doge devs to improve system transaction efficiency.”
Lee doubled down on bitcoin’s advantages and highlighted the cryptocurrency has never seen a fraudulent transaction since it was launched. As for BTC’s declining market dominance, he argued it will “actually grow during a bear market.”
Lee, it’s worth noting, accurately called late last year the price of bitcoin would go to $40,000 this year
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The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.
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