Bitcoin Best Crytpocurrency Bet: Fundstrat's Lee

Bitcoin, the leading cryptocurrency, may be down, but it isn’t out, as it regains share in the digital token market after several punishing months for investors.

While Bitcoin is trading off its high of more than $19,000, it has been making a comeback as it received positive news on the regulatory and investment fronts. That has led Tom Lee, managing partner at Fundstrat Global Advisors, to sing the cryptocurrency's praises. "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," Lee said on CNBC’s “Fast Money.” "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." (See more: SEC Rejects Winklevoss Bitcoin ETF Plans.)

Bitcoin Making A Comeback

While the price of bitcoin isn’t anywhere near its record highs, it is making a bit of a comeback. At the end of June, it hit its lowest price for the current year according to CNBC, dipping below $6,000 only to rally to close to $8,400 in July. Currently, it's trading around $7,050. Lee pointed to Securities and Exchange Commission news  for the increased optimism. Earlier in the summer, the SEC said it would classify bitcoin as a commodity rather than a stock. That provides investors with a glimpse of how the digital token will be regulated by the SEC. Adding to the optimism is news released by the Intercontinental Exchange, NYSE's operator, which said Friday it was creating a cryptocurrency company and was partnering with the likes of Starbucks (SBUX) and Microsoft Corp. (MSFT) to create an online platform called “Bakkt”. Bulls say the announcement from Intercontinental Exchange could help to further legitimize bitcoin. Not to mention that if the SEC relents and approves a bitcoin exchange-traded fund it would be huge for the marketplace. (See more: NYSE Parent ICE to Roll Out Crypto Exchange.)

Market Share Gains Increasing

While the news has been lifting bitcoin's price, Lee of Fundstrat said investors should be paying more attention to digital token's increasing market share. Bitcoin commanded 80% of the market at the beginning of last year. In January, that declined to around 36%, reported CNBC. During the last few weeks, its market share has increased to 48%. "I think bitcoin dominance is actually showing the market is reacting to what's been taking place," Lee said.

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