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Bitcoin Bull Tom Lee cautious as Bitcoin Price gets closer to $ 7,500

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Wall Street strategist Tom Lee urges investors to caution following the staggering advance of the Bitcoin price. first week of November.

The price of bitcoin reached dizzying heights this week, and that progression continued on Friday as bitcoin began testing the $ 7,500 mark for the first time in its history. At current levels, bitcoin is up 25% for the week, nearly 75% for the month and over 700% for the year.

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<p class= BTC price chart | Source: BitcoinWisdom

As Bloomberg reports the Wall Street strategist, Tom Lee, fears that Bitcoin is preparing for a correction. Lee, head of research at Fundstrat Global Advisors, urges investors to be cautious, even as new optimists such as the recent announcement of CME Group's launch of term bitcoins.

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Lee's lukewarm tone is not unusual on Wall Street. Many executives and analysts are still not convinced that Bitcoin has the power to stay.

However, unlike the legion of skeptics of the dominant financial industry, Lee is one of the most fervent bitcoin supporters and has earned a reputation as the biggest bitcoin bull on Wall Street. For months, Lee made the headlines with his prediction that the price of bitcoin will reach $ 6,000 by mid – 2018 and $ 25,000 by 2022.

However, the price of bitcoin has exceeded Lee's short-term price target of more than $ 1,000, and fears that the rally will become more important, citing "contemporary fundamentals" in a note distributed to Fundstrat customers this week.

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Fundstrat's Bitcoin valuation strategy is modeled from Metcalfe's law and predicts that the fair market price of Bitcoin equals the square of the number of its users multiplied by the average value of the transaction. Lee says this model accounts for the recent bitcoin trajectory with more than 90 percent accuracy, and he does not believe the network's user base has grown enough to justify the current price of bitcoin.

In the short term, Lee recommends to buy Bitcoin if it is in the range of $ 5,500 and buy shares of Bitcoin Investment Trust (OTC: GBTC) to $ 750, but maintains its target of $ 6,000 in mid-2018 and target of $ 25,000 over five years.

Image from Shutterstock to photo

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