Bitcoin analyst Tom Lee has predicted that the cryptocurrency could end the year explosively higher and citing a correlation between cryptocurrency and emerging markets. Tom Lee has made his new prediction in an interview during a Trading Nation show organised by CNBC August 25.
The Head of Research at Fundstrat Global Advisors has said that according to Tom Lee he still thinks it’s possible, that Bitcoin price could surge to as high as $25,000 this year. Tom Lee has based his prediction on the relationship between the price of BlackRock and Bitcoin on iShares MSCI Emerging Markets Exchange-Traded fund (ETF), which tracks medium sized and large companies in emerging markets.
According to Tom Lee, the important fact lies in that, Both markets bitcoin and emerging market are running somewhat parallel to each other, with both having really essentially peaked in early 2018, as well as both bitcoin and emerging market having been in a downward trend from then till now.
According to Tom Lee, recent trading activity of hedge has shown that hedge funds are not buying funds they have stopped buying into funds which are tied to emerging markets due to market sell-off risks, which, in turn, leads to reduced purchases of Bitcoin and other cryptocurrency too.
As Tom Lee believes, a little change in the direction of the emerging markets would signal a similar change in Bitcoin trend: “Until emerging markets begin to turn, Lee thinks in some ways that the correlation of bitcoin and emerging markets is going to hold and tell us that sort of the risk on mentality is those buyers are not buying bitcoin.”
In the interview at the Trading Nation, Tom Lee pointed out and said that the tide is changing for cryptocurrency but in this case for both emerging markets and Bitcoin, especially if the U.S. Federal Reserve slows down its interest rate and hikes. Last month that is on July, Lee assumed and voiced his stance that Bitcoin could reach anywhere between $22,000 to $25,000 by the end of 2018.