Bitcoin (BTC) is recently struggling to reach the $8,000 foothold it had weeks ago. As of this writing, it’s currently valued at over $7,000. Despite the fall, co-founder and Fundstrat tactician Tom Lee says price surge on Bitcoin will reach $25,000, backing his claim by citing three major factors.

The first factor is BTC’s production and replication expense. Lee explains that BTC was “trading at cost” because the cost of production is almost similar to the cryptocurrency’s trading value. The mining cost of BTC is estimated at $6,000 on Wednesday, which means its value still exceeds the expense of production.

The second factor is the data gathered by Fundstrat showing prior patterns of Bitcoin in the past. "Historically, 10 days comprise all the performance in any single year of Bitcoin's price. If you just took out those 10 days, Bitcoin's down 25 percent a year. So as miserable as it feels holding Bitcoin at $8,000, the move from $8,000 to $25,000 will happen in a handful of days,” Lee explained. The recent plunge puts Bitcoin at a 41 percent drop this year, which the strategist shrugged off saying it’s simply the volatile nature of crypto that’s causing it.

The third factor is institutional investors which Lee considers to be the most significant. Since Bitcoin is a nascent technology, investors are still wary to place large sums on the digital currency. Regulatory uncertainty is also another reason for such caution. And this is the vital key that can propel Bitcoin to the $25,000 mark that Lee is predicting.

When these institutional investors ultimately enter the crypto space, Bitcoin's price will soar. Of course, they have yet to do such a thing but there are those who are already considering it. And when this interest transforms into implementation, Lee’s predicted number isn’t as outlandish as he claims.

Regulation will likely play a large role whether these institutional investors will indeed commit. Data on this is promising since legislators seem to be supporting the growth of the crypto market. Recently, the Industry, Research, and Energy Committee advised the EU Commission to place a legal groundwork for various blockchain developments that are “technologically neutral” and “innovation-friendly.”