Bitcoin’s Emerging Market Correlation

bitcoin emerging market

Is there a correlation between bitcoin and emerging markets? Will bitcoin hit $20,000 by year’s end and $60,000 in the next few years? Well, Fundstrat’s Tom Lee makes a case for the MSCI Emerging Markets Index having a correlation with bitcoin and BTCC Co-Founder Bobby Lee predicts bitcoin at $60,000 ahead of us. But hey, rather than me spilling all the details lets let them make their case in a great article. Take a read. (note: my call for bitcoin? UP!)
Bill Taylor/ Fintek Capital

“As the bitcoin dominance index expands to 53.7%, indicating that bitcoin’s value contribution to the broader cryptocurrency market is strengthening, industry veterans are extrapolating future price direction, drivers and leading indicators. It’s a reminder of the early innings in which the cryptocurrency market remains, one whose potential and drivers are still being uncovered. Fundstrat Co-Founder Thomas Lee and BTCC Co-Founder Bobby Lee both shared their latest analysis with the public, and both conclude that bitcoin is on a bullish path for the foreseeable future.

Fundstrat’s Lee on CNBC points to mining and the network effect as drivers of bitcoin’s value, but he expanded on that theory, noting that “macro factors” are also at work in network value. Lee dug up a correlation between the MSCI Emerging Markets Index and the bitcoin price, one in which a pattern has developed between the assets. The MSCI was launched in 1988 and boasts more than “$1.9 trillion in assets benchmarked to the MSCI Emerging Markets Index suite.”…

…the MSCI Emerging Markets Index (had) a bull run at year-end 2017 even as the bitcoin price was peaking. Meanwhile, the MSCI Emerging Markets Index, like the bitcoin price, has been under pressure for much of 2018.

Lee’s theory is two-pronged, comprised of macro hedge funds, which are playing an increasing role in the crypto market at exchanges like BitMEX, and the ‘wealth effect,” which reflects emerging market local investors who have less money to invest in bitcoin when their respective stock markets are in decline. Lee maintains his bullish forecast a bitcoin price of around $20,000 by year-end, reminding investors that bitcoin’s yearly gains tend to boil down to the 10 best trading days of the year…”

Full Story at Hacked