Bitcoin to go hand in hand with S&P 500 - Tom Lee

Co-founder of Fundstrat Global Advisors Tom Lee shared his views on the state of the cryptocurrency market in the recent interview with CNBC.

A prominent Bitcoin bull retains his optimistic stance, saying that the first digital currency will hit a new record high soon. However, he also added that the market desperately needs a catalyst to escape its range-bound and directionless trading. Lee bets on a stock market rise.

“Bitcoin has kind of stalled recently because the macro outlook has stalled. I think, in a world without trend, bitcoin doesn’t go up. The next big catalyst, I think, is a decisive breakout in the equity markets, because I think once equities break to an all-time high, bitcoin becomes a risk-on asset.” Lee said speaking on CNBC’s “Fast Money.”

He believes that a stimulating monetary policy approach exploited by global central banks will result in strong liquidity growth. Considering a low-interest-rate environment, investors will seek for alternative assets to park their money.

“If markets make a new all-time high and we see central banks still supportive, it’s kind of good for liquidity, so there’s ... liquidity going into bitcoin. More importantly, if there’s an interest in acquiring some volatility, that’s where you’re going to see people buying bitcoin,” he said.

Lee expects the S&P 500 to hit at least 3,125 by the end of the year. If history is any guide, the rally could create a necessary precondition for another strong bull’s run on the cryptocurrency market. 

“Bitcoin does best when the S&P’s up more than 15%. Bitcoin may be ambidextrous [in] that it works well in a risk-on world, but as you start to get nervous, then you treat it like digital gold,” Lee explained.

At the time of writing, BTC/USD is changing hands at $10,400, mostly unchanged both since the beginning of the day and on a day-on-day basis. All major altcoins are oscillating in tight ranges with no clear direction.