One of Wall Street's biggest bitcoin bulls says the cryptocurrency could "easily double" or even triple in 2018.
In August 2017, Tom Lee, co-founder and head of research at Fundstrat Global Advisors, predicted bitcoin's rally above $10,000 and declared that the digital currency would outperform equities through the end of the year. Sure enough, bitcoin rallied to a high near $19,800 in December, with its performance widely outpacing stocks.
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Since that high, however, the cryptocurrency has fallen 25 percent, trailing stocks, gold and oil, which are up a respective 3 percent, 5 percent and 10 percent during that period.
Despite the drop, Lee is still pounding the table on the cryptocurrency.
"Even on a risk-adjusted basis, I think bitcoin is going to easily outperform the S&P," Lee said Tuesday on CNBC's "Futures Now." "On a long-term basis, [the easiest way to look at bitcoin is] as a replacement or a store of value," he said. "So as millennials discover and generate income, they're going to use it as a replacement for gold."
Investors have quipped that the bitcoin boom could be taking market share from gold. Over the last year as bitcoin surged about 1,535 percent, gold has been tethered around the $1,300 level.
"If [bitcoin] gets 5 percent of the gold market, that's roughly $50,000," he added. That's a more than 200 percent move from where bitcoin is currently trading.
On a near-term basis, Lee expects bitcoin to reclaim its December high. "We think that by mid-2018, we're going to be part of the way there, and that's why we get [bitcoin to $20,000]," he said. "If [bitcoin] can actually rise close to [that $20,000 level] in the first half of this year, I think in the second half of 2018, we'll see a move bigger than that," Lee said. "So I think bitcoin is still something you should own [all year]."
Despite its underperformance in the past month, bitcoin is still up 15 percent in the first few days of 2018.