Tom Lee, Fundstrat’s Bitcoin analyst, derives a ‘correlation,’ between BTC and emerging markets and deduces that Bitcoin’s prices will start an upward trend soon. In fact he predicts that it will rise up to approximately $25,000 before the end of the year.
Lee claims the aforementioned, in an interview during CNBC’s “Trading Nation” show August 25. The co-founder of Fundstrat Global Advisors based his current assumption upon the relationship between the price of BTC and BlackRock’s iShares MSCI Emerging Markets exchange-traded fund (ETF), which tracks large and mid-sized companies in emerging markets.
According to Lee, the “important correlation,” is derived from the somewhat concurrent run that both the markets are experiencing. In early 2018 both observed “really essentially peaked”, as well as “both [having been] in a downward trend” from then on. The iShares MSCI Emerging Markets Index ETF has reduced by almost 8%, so far this year. While bitcoin has experienced a low of about 65% and fell from its $20k mark in December last year to $6k mark since August 8th.
He further noted that hedge funds have stopped buying into funds tied to emerging markets due to market sell-off risks. A similar trend is observed for BTC as well. Lee believes Bitcoin’s trend will follow the change in direction in emerging markets.
“Until emerging markets begin to turn, I think in some ways that correlation is going to hold and tell us that sort of the risk on mentality is those buyers aren’t buying bitcoin.”
One of the biggest Bitcoin bulls on Wall Street also claims that he foresees that “tide is changing” in favor of both markets and cryptocurrency “could end the year explosively higher.” Lee adds that there are firepower and big money on the offshoots in the
Lee has been bullishly confident about Bitcoin for quite long. Earlier this month, Lee stated that BTC is keeping up the current levels of price and volatility and thus cannot be considered ‘broken.’