×
Newsmax TV & Webwww.newsmax.comFREE - In Google Play
VIEW
×
Newsmax TV & Webwww.newsmax.comFREE - On the App Store
VIEW
Tags: bitcoin | tom lee | fundstrat

Bitcoin Bull Tom Lee Says HODL On During Slumps for Big Gains

Bitcoin Bull Tom Lee Says HODL On During Slumps for Big Gains
(Source: Fundstrat)

Wednesday, 28 March 2018 05:18 PM EDT

Bitcoin advocate Thomas Lee is leaning on his years of experience as a stock analyst when warning cryptocurrency investors that they need to be patient in the wake of this year’s more than 40 percent decline.

“Market timing is generally discouraged in traditional equity investing,” Lee, the former chief equity strategist at JPMorgan Chase & Co., wrote in a note Wednesday. “If an investor missed out on the 10 best days (for S&P 500) each year, the annualized return drops to 5.4 percent (ex-10 best), from 9.2 percent. In other words, the case for buy and hold in equities is the opportunity cost of missing out on the 10 best days.”

If an investor missed out on the 10 best days for Bitcoin each year, the annualized return drops 25 percent annually, wrote Lee, managing partner and head of research of Fundstrat Global Advisors LLC. On average, Bitcoin was down every year with the exclusion of the top 10 day gains, according to Fundstrat data. With a handful of days each year accounting for the bulk of Bitcoin’s gains, holding is a sensible option, he said.

That may bring some comfort for those pledging to HODL -- one frenzied trader’s misspelled entreaty to hold onto the tokens during an earlier rout that’s become the mantra of Bitcoin purists.

Bitcoin is trading at the breakeven cost of mining, at about $8,000, based on a model by Fundstrat. “The overhang from regulatory risk is generally keeping investors sidelined," Fundstrat analysts including Robert Sluymer wrote in the note. "However, we see positive catalysts for Bitcoin later in 2018, including the clarification of regulatory hurdles."

Combined with the overhang from U.S. Securities and Exchange Commission actions and political backlash coming from Washington on cryptocurrencies, Fundstrat predicts a "purgatory" period forecast of 150 to 175 days aiming for mid-September.

© Copyright 2024 Bloomberg News. All rights reserved.


StreetTalk
Bitcoin advocate Thomas Lee is leaning on his years of experience as a stock analyst when warning cryptocurrency investors that they need to be patient in the wake of this year's more than 40 percent decline."Market timing is generally discouraged in traditional equity...
bitcoin, tom lee, fundstrat
304
2018-18-28
Wednesday, 28 March 2018 05:18 PM
Newsmax Media, Inc.

Sign up for Newsmax’s Daily Newsletter

Receive breaking news and original analysis - sent right to your inbox.

(Optional for Local News)
Privacy: We never share your email address.
Join the Newsmax Community
Read and Post Comments
Please review Community Guidelines before posting a comment.
 
Get Newsmax Text Alerts
TOP

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved
NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved