Bitcoin (BTC) prices have dropped 51.15% in Q1 2018, but one Bitcoin bull proclaimed the sell-off could be over. Thomas Lee, head of research at Fundstrat Global Advisors, believes that the price drop was thanks to tax season.
And Lee believes Bitcoin prices are going to rebound 206.64% from today's price of $8,152.66 now that tax season has ended…
According to his April 5 report, U.S. households likely owe $25 billion in cryptocurrency capital gain taxes. To pay it off, Bitcoin holders have likely been selling off some of their coins since the start of 2018.
In addition, the crypto analyst believes exchanges have been unloading their cryptocurrency holdings.
"Many exchanges have net income in 2017 [of more than] $1 billion and keep working capital in [Bitcoin, Ethereum], not USD – hence, to meet these tax liabilities, are selling BTC/ETH," Lee said in his research report.
The head of research at Fundstrat projects for each U.S. dollar of outflow, there is a $20 to $25 impact on the value of the cryptocurrency market.
With people either selling or just holding onto their coins, there's been less demand, which has sent prices spiraling.
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The cryptocurrency market was worth $813 billion on Jan. 7, but it now sits at $329 billion.
Taxes are due on April 17, so if Lee is right that part of the sell-off was caused by tax payments, prices could quickly rebound to previous all-time highs of $20,000 on Dec. 17, 2017.
Lee believes the price of Bitcoin will return to $20,000 by July 2018.
By the end of the year, he projects the price of Bitcoin will reach $25,000, which would be a gain of 206.64%.
However, that estimate may be too conservative…
The Shocking Reason Why We Think Bitcoin Could Hit $100,000 (and How You Could Make Millions)
Money Morning Defense and Tech Specialist – and cryptocurrency legend – Michael Robinson just revealed the little-known details regarding the future of Bitcoin… and why at any moment, it could be poised for a record-breaking rebound far beyond anything we've witnessed already.
Michael made a prediction about Bitcoin way back in 2013 – and folks who followed his advice stood to become 253 times richer.
We'd venture to say not one in 10,000 people is aware of the massive profit potential unfolding right now.