Tom Lee: I want to be clear, bitcoin is going to $25,000 by year end

Bitcoin is back the cryptocurrency rallying 10% in the past week despite a late day sell-off let's get to our Bob Pisani the New York Stock Exchange for all the details hey Bob hello Melissa oh here's the good news Melissa's right bitcoins up about 10 percent in the last few days though it did drop quickly mid day that's a little mysterious it's not clear exactly what happened here in the middle of day now some note that electronic payments company square has withdrawn its application to get into the banking business that's according to American Banker that was a big new deal back in June New York financial regulators granted square the go-ahead to allow New Yorkers to trade crypto currencies on its cash app so today's robbed may be due to concern that there may be less future volume in cryptos

Now there's not much good news for Bitcoin recently folks it broke through the psychologically-important 6000 level you know that last week that happened it's still in a long and even a short-term downtrend in fact the last time there really was a rally of any note was way back in April when Bitcoin went from about 7,000 to almost 10,000 in about two weeks that's done anything since then on the upside now there been some reports that volumes on some exchanges have increased in the last few days as Bitcoin has come back a bit now that may be true but a few days is a very short time horizon and a lot of these foreign exchanges have shall we say questionable monitoring tools

I'm being kind when I say that watch the volumes at coin base that's what I do this is the largest us-based crypto exchange now if you just take a look at the dollar bottoms look here the last few months they have been clearly on the decline it's down about 80 percent from the February levels to the June levels and it's down four months in a row you can see that clearly here's what I want to see let's see if we can at least get July levels from dropping over the June levels just bottoming out at this point Melissa would be a victory back to you all right Bob thanks Bob Pisani at the NYSC our next guest sent shockwaves shockwaves across the crypto market

When he made these comments on CNBC earlier today bitcoins historically traded at two and a half times its mining costs so it's not out of the question that it could be over 20,000 by the end of the year now Bitcoin would still have to rally over 200 percent to reach 20,000 but the $20,000 comment was interpreted by some as a sign of bearishness now we may remember even as Bitcoin has plunged Tom Lea stood by his 25 thousand year end price target for Bitcoin Tom though is back to say reports of his bearishness have been greatly exaggerated Tom thanks for coming back it did take me about is there a ton Spock walks with you this morning and it did take me back when you said over 20,000 instead of saying 25k so do you stand by 25k well I do think it's the first time

I've ever heard someone thinking something could triple is a bearish Congress right I may have misspoken a little bit I think what I was trying to illustrate was that given where mining cost will be and applying the historical average of two and a half times mining cost that would imply fair value over 20,000 roughly 22,000 so I don't you know we still think Bitcoin can reach 25,000 by the end of the year or something like that but it's still a huge move from where it is now so you're not bearish and I get how that's completely exaggerated taken out of context but it doesn't sound like you're as bullish we've had Bob rob Slimer on from your shop as well and at the charts you would put Bitcoin up you'll come over I would ask him so you know it's 25k past when is a it's gonna be hard but yeah that's the fourth yeah

If you look at the history of Bitcoin I think a couple reasons why 25,000 still possible is one I mean Bob has pointed out you know Bitcoin moved you know from 7,000 10,000 in a couple weeks but from from a historical perspective over any six-month period 35 percent of the time it's more than tripled so in other words it's you know in at any typical period Bitcoin could triple you know one in three times so I think it's not out of the question that Bitcoin can make a big move from here and I would just point out what makes it unusual today is that bitcoins trading below mining cost and six months forward now this is only of course you know roughly 10 years of history bitcoins had a positive turn in nearly a hundred percent of instances whenever it's traded below mining cost so I think the risk/reward is still very asymmetrically positive for bitcoins Riley's got to start soon

Though I mean you say six months out we're six months inches a year so you have something the challenges of course bitcoins quite volatile and it's only got a 10-year history but it is in the entire history it's always been a good time to buy it below mining cost so I don't understand why mining cost is necessarily a floor I mean we've seen another thing the cost of mining gold for example things trade below that why is it necessarily something like replacement cost why is mining cost necessarily a floor well mining represents so let's say let's imagine bitcoins of commodities

So mining represents the flow right cuz it's the block reward and so in any commodity where you're looking at flow incremental cost does actually explain or govern the price so for instance the all-in sustained cost of gold is actually a tachometer or a speedometer that really gold trades around gold stocks have historically traded pretty tightly in a band of price-to-book so bitcoin isn't a great buy when it trades one standard deviation above it's two and a half times which is like over three like three and a half and it's always actually a good buy when it's trading below one times and it's it's unusual to trade below one times okay so you're still bullish

Clearly yes I am jet lag too but while you're here want to get your opinion on some other coins we thought we'd play a little would you rather were tomley crypto style so I'll give you two cryptocurrencies Tom you tell me which one looks like the better of the two for the rest of this year first and he's jet lag to Mel C I know I know guys to the man come on Bitcoin versus aetherium would you rather Bitcoin yeah and it's because you know I think that the investment case for bitcoin is a little easier because it's a store value it's got a long history Ethier aim has some competition we still like it but as competition Bitcoin versus light coin will take Bitcoin again now no offense to Charlie you know our cousin charlie yeah but I'd rather Bitcoin over Lakeland and we're gonna end this with a ripple versus Bitcoin cash

I'd pick Bitcoin cash over Ripple because you know I think it's some ways Bitcoin cash has some unique features relative to Bitcoin so there's some merits to owning it I want to do a bonus round with you oh okay Wow Bitcoin or US equities here to the end of the year between between now and your end you know we think the SP can do mid to high single digit gains right that would get to our roughly 3000 and I think Bitcoin can easily do well beyond that which we know and you're in so I'd rather own Bitcoin but of course you know it is riskier so it's different than owning an equity okay Tom thank you despite your jet log for joining us we appreciate a timely a fun strat well

I tell you what I tend to agree with Karen that I have trouble with this whole essentially the cost of mining because I don't really think it's commodity I don't think people really I I see that target moving around I think Bitcoin to me is probably range bound and I think we're waiting for an event of some kind that's going to be the catalyst there's no question that people want to come in I think you need the retail guy back in and I think retail sideline