Over the years, the price of Ethereum has generally mirrored Bitcoin, rising when Bitcoin rises and falling along with it. However, there appears to have been a deviation in the current cycle, with Bitcoin price hitting multiple all-time highs while Ethereum lagged behind. Nonetheless, expectations remain that ETH will eventually catch up to BTC, with Fundstrat CIO Tom Lee predicting that ETH could replicate the Bitcoin supercycle.
Tom Lee prepares for a Bitcoin-like supercycle on Ethereum
Fundstrat has become a household name in the cryptocurrency industry, and its CIO, Tom Lee, has become even more famous for his commentary and predictions about digital assets in the space. Always bullish on Ethereum, one of Lee’s recent updates covers the multi-year ‘Bitcoin supercycle’ and the next reasons why Ethereum could replicate it.
This post described Fundstrat’s clients’ foray into the world of Bitcoin and cryptocurrencies when it was first featured in 2017. Lee said at the time that Fundstrat advised investors to allocate 1-2% of their investment portfolios to Bitcoin.
The price of BTC was ‘high’ at the time, but very low compared to now. However, in the 8.5 years since, the digital asset has performed exceptionally, with customers holding BTC receiving a 100x return on their holdings.
Fast forward to the present, and Lee explained that Fundstrat is expecting a supercycle to occur again, but this time not in Bitcoin. Ethereum has become the company’s new favorite, and its CIO believes ETH could follow the same trajectory as Bitcoin.
The reason, Lee explains, is that “doubt breeds volatility because cryptocurrency prices are massively discounting the future.” This means that the company expects prices to be much higher in the future than they are now, and Ethereum could be a major beneficiary of this expansion.
But he also warned that the road to this supercycle will not be easy. In the case of Bitcoin, the price of Bitcoin plunged more than 50% on six occasions and by 75% on three occasions before completing a 100x rally. Therefore, the key point is, “The higher road is not a straight line.”
Considering the current price of Ethereum and a similar time period as Bitcoin, a 100x increase would push the price of Ethereum to $300,000. However, the timeframe means this will happen sometime in 2033.
Featured image by Dall.E, chart by TradingView.com
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