Despite bitcoin's tumble during the past two weeks, Wall Street bull Tom Lee says the cryptocurrency is gradually regaining market share — which should comfort bitcoin buffs.
"The news that we have seen, from the SEC saying bitcoin's a commodity, to ... the potential for an [exchange-traded fund] is causing investors to decide that bitcoin is the best house in a tough market," Fundstrat Global Advisors' managing partner said on CNBC's "Fast Money."Â
Bitcoin has been on a near-steady downward slide since briefly topping $19,000 in December. It dropped below $6,000 at the end of June — its lowest value all year, according to Coindesk. The cryptocurrency then rallied, approaching $8,400 in July, before tumbling back down to around $7,000 in recent days.
"Bitcoin isn't broken if it's holding at these levels. I think people are afraid it is going to go back down to $6,000 and never come back from those bear markets," Lee said Monday.
Bitcoin's price remains low, despite a rash of developments in the cryptocurrency world.Â
Securities and Exchange Commission officials have publicly labeled bitcoin as a commodity and in June made it clear that cryptocurrencies would not be treated like securities, which offers a peek at how the agency might seek to regulate them. The Intercontinental Exchange on Friday announced a partnership with major companies, including Starbucks and Microsoft, that will aim to create an open and regulated digital asset ecosystem. Crypto bulls say this development could help legitimize bitcoin.
Bitcoin may not be reacting outright to the news, but the true sign of its return is the regaining of its market share, Lee said.
At the start of 2017, bitcoin claimed about 80 percent of the overall cryptocurrency market. About a year later, by January, bitcoin's market share has dropped to only about 36 percent. However, it went on to creep up for the rest of the year.
In the past couple of weeks, bitcoin's market share has soared to its highest level all year to around 48 percent, Lee said.
"I think bitcoin dominance is actually showing the market is reacting to what's been taking place," Lee said.
Bitcoin was up 2 percent Tuesday morning, trading at $7,075, according to Coindesk.
