Ethereum (ETH) is down 84% from its $1,400 all-time high in Jan. 2018 but that doesn’t stop Fundstrat’s Tom Lee from being bullish on the second biggest cryptocurrency by market capitalization ($22.7 billion). Ether is “about to rally strongly” and possibly go up to $1,900 by end of 2019, Lee told CNBC.
Ether has underperformed other top cryptos in the past three months and is trading at $222 as of press time. However, Lee suggests that its price is undervalued which gives investors an opportunity to buy the dip and capture future profits. The former managing director at JPMorgan said “Ethereum is about to stage a trend reversal” and has seen unfair, “overly negative” sentiment from investors due to several factors. These include competition from EOS which is vying to become the top blockchain platform for developers as well as technical challenges and vulnerabilities on the Ethereum platform.
Tom Lee has gotten some flack from crypto investors for his overly bullish predictions on Bitcoin (BTC). Throughout the summer, he was adamant that Bitcoin would reach $25,000 by end of year although that scenario now appears highly unlikely.
Lee said that Ether underwent selling pressure from initial coin offerings (ICOs) this year. In early September, ICOs held $720 million worth of Ether (at $192 price) from their fundraising activities. He added that it saw selling pressure from EOS investors as EOS moved from the Ethereum blockchain to its own network.
Advisory firm Satis Group recently forecasted Ether to reach $882 in 2019, a more conservative projection than Lee’s $1,900 target price. The firm, which has offices in New York and San Francisco, believes Bitcoin will reach $32,914 next year. It also expects privacy coins such as Monero (XMR), Zcash (ZEC) and Dash (DASH) to have the highest gains over the next 10 years.
However, Ethereum co-founder Vitalik Buterin said recently that the days of massive price gains in cryptos are likely over. “If you talk to the average educated person at this point, they probably have heard of blockchain at least once. There isn’t an opportunity for yet another 1,000-times growth in anything in the space anymore,” he told Bloomberg on Sept. 8.
Earlier this week, Ethereum co-creator Joseph Lubin wrote in Sept. 25 Quartz op-ed that cryptocurrencies represent a natural evolution of money and “one that favors truth over state-sanctioned power.”
Lubin wrote, “Perhaps it is not surprising that the emergence of cryptocurrencies has unleashed equal waves of fascination and skepticism. These bits of cryptographically secured bundled data are just the newest form of value representation—the 21st century’s version of that flimsy paper money.”
He added, “This new cryptocurrency system provides information, reduces costs, and adds value to transactions between who owns what. Creating consensus without a central actor is also a profound evolution of the social contract. The very consequence of this new system allows economic agents to discover the potential in new types of assets …”
As of late Friday, Ether had 24-hour trading volume of $1.99 billion and dropped nearly 4% in the past day. It has circulating supply of 102 million ETH tokens.
Articles by Marvin Dumont: