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Bitcoin Bull Tom Lee Predicts End Of Alt-coin Bear Market

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The bear market for small-cap cryptocurrencies, otherwise called alt-coins, is over, but it will be a while before they enter a bull market, a prominent Bitcoin bull Thomas Lee, head of Fundstrat Global Advisors said.

Alt-coins, which are those other than Bitcoin and Ethereum, go through "purgatory" periods before a bull market is underway, Lee and his team of researchers said in a client note.

Fundstrat has an indicator that tracks the share of cryptocurrencies that have risen more than 200 percent over 90 days. The indicator hit 78 percent in mid-January, but fell to 3 percent this month.

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Lee expects the current purgatory period for alt-coins to last for 150-175 days, which is longer than the usual 70-231 days. This means a bull market is likely to begin only between mid-August and mid-September.

"The reason for this longer duration is the current dark clouds overhanging crypto are really alt-coin specific," Lee and his team wrote.

The US Securities and Exchange Commission is yet to provide clarity on the status of all alt-coins, i.e., whether they are security tokens that require registration. The numerous raids, investigations and subpoenas by authorities also adds to the risk.

During the time, investors should stick with larger coins like Bitcoin, the Fundstrat analysts said.

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