Fundstrat's Bitcoin (BTC) analyst Tom Lee made the latest predictions about Bitcoin's movements in an interview with CNBC yesterday. He said that Bitcoin "may rise sharply at the end of this year" on the grounds that there is a link between Bitcoin and emerging markets.
As the research director and principal analyst of Fundstrat Global Advisors, Tom Lee said he still believes that the price of Bitcoin may soar to $25,000 by the end of the year. He is based on the relationship between Bitcoin and the MSCI Emerging Markets Index.
Tom Lee believes that the operation of these two markets is parallel to some extent. Both markets reached the “real peak” in early 2018, and since then “have been in a downward trend” .
Tom Lee said that recent trading activity suggests that hedge funds have stopped buying funds linked to emerging markets due to market selling risks, which in turn has led to a decline in Bitcoin purchases.
As Tom Lee believes, changes in emerging market direction will herald similar changes in the bitcoin trend:
“Before the emerging markets began to turn, I think that, to some extent, this correlation will remain the same.
In an interview, Tom Lee also pointed out that at present, the trend of bitcoin and emerging markets is changing, especially if the Fed slows interest rate hikes.
In early July, Tom Lee expressed his position that by the end of 2018, the price of Bitcoin could reach between $22,000 and $25,000.
Earlier this month, Tom Lee also cited Fundstrat's Bitcoin Market sentiment index (BMI) to indicate current market conditions. The index is a tool that measures the “tragic” level of Bitcoin investors based on the price of the cryptocurrency and its volatility.