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Tom Lee on Next BTC Catalyst and Upcoming Record-Highs

Co-founder and the Head of Research at Fundstrat Global Advisors, Tom Lee, said in an interview with CNBC that if equities rise, bitcoin will follow – and all-time-highs may be coming soon. The next big catalyst for Bitcoin, in his opinion, “is a decisive breakout in the equity markets because once equities reach an all-time high, bitcoin becomes a risk-on asset.” Lee explained that the reason behind BTC stalling recently, is the stalling of the macro outlook, arguing that a trend is necessary for BTC to rise. If markets make a new all-time-high and still have the support of the central banks, that’s good for liquidity; liquidity will go into BTC, and “if there’s an interest in acquiring some volatility, that’s where you’re going to see people buying BTC”.

As a matter of fact, BTC does best, Lee says, when the S&P 500 index (a stock market index that measures the stock performance of 500 large companies listed on stock exchanges in the U.S.) is above 15%. S&P’s best years in the last decade have coincided with BTC’s best years, he says.

On the question about Bitcoin being a hedge against risk, Lee replied: “BTC may be ambidextrous […] in that it works well in a risk-on world, but when you start to get nervous, then you treat it like digital gold. What we had in the summer was neither environment; it was a market that looked like it was on a precipice, that looked like it could fall — but it never did. And I think getting stuck in that trend was bad for BTC.”

Lee thinks that “we’re inching closer” to record-highs. “Our base case has been for a second-half rally in the S&P 500 to greater that 3,125 – all-time-high is around 3,025 – I think we’re going to surpass that soon, and it would be bullish for Bitcoin.” Furthermore, if those two hit an all-time-high, it may bring about the start of an alt season.