Why Fundstrat's Tom Lee Says Bitcoin Could Still Reach $100K In 2021

Hypervolatility in cryptocurrencies creates opportunity and reward, Fundstrat's Tom Lee said Monday on CNBC's "TechCheck."

Volatility in Bitcoin BTC/USD is systematic to the network itself, Lee said. 

Much of the recent volatility came from institutional traders on the short side of the Bitcoin trade, he said, adding that he believes many of those traders covered their short positions — explaining the quick rise in Bitcoin this week. 

What Happened: Recently, the cryptocurrency space underwent extreme volatility as Bitcoin and other popular cryptocurrencies sold off more than 50% from all-time highs before bouncing. 

Although digital money is a new concept, the idea is logical in a digital economy, Lee said.

He told CNBC that he believes Bitcoin could still reach $100,000 by the end of 2021. 

"Even though #bitcoin is in the penalty box now, I still think it can exit the year over 100,000," says Tom Lee ( @fundstrat ), Co-Founder & Managing Partner of Fundstrat Global Advisors. He weighed in on the crypto ecosystem after a bumpy week. pic.twitter.com/CvdWwTH2WC

— TechCheck (@CNBCTechCheck) May 24, 2021

Related Link: Where Bitcoin Headed Next Depends On Stock Market? So Says Crypto Big Shot Barry Silbert

Price Action: Although Bitcoin has fallen dramatically from its recent highs, the cryptocurrency is still up 30.15% year-to-date.

At last check Monday, Bitcoin was up 15.32% at $39,017.78.

Image by Pete Linforth from Pixabay.