Fundstrat’s Thomas Lee has warned cryptocurrency investors to be patient in the wake of this year’s more than 40 percent decline, Bloomberg reported.
“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,” the Bitcoin advocate added.
He added that if an investor missed out on the 10 best days for Bitcoin (EXANTE: Bitcoin) each year, the annualized return drops 25 percent annually.
Fundstrat data shows that Bitcoin was down every year with the exclusion of the top 10 day gains. In Lee’s opinion, with a small number of days every year making up the bulk of Bitcoin’s gains, holding is a sensible option.
Fundstrat analysts see a positive catalysts for Bitcoin later in 2018, including the clarification of regulatory hurdles.
The company predicts a "purgatory" period of 150 to 175 days aiming for mid-September and maintains a year-end target of $25,000.