This little-known market correlation could be a huge signal for Bitcoin to hit $25k - before the end of 2018!

Outlining his theory on CNBC's Trader Nation, Tom Lee of Fundstrat Global Advisors says he's found a direct correlation between emerging markets and Bitcoin.

Lee says "Both really essentially peaked early this year, and they both have been in a downward trend. 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."

Emerging Markets ETF index (iShares MSCI specifically) is down about 8% this year, and Lee believes that's headed for a turnaround and soon - and when that happens Bitcoin will follow. The reason a turnaround is soon expected is that based on the belief the Federal Reserve will announce a pause in recent interest rate hikes.

Then the correlation between Emerging and Cryptocurrency markets comes from the idea that while large fund's investments in emerging markets are moving downward, they also hold off on other high risk investments - like cryptocurrency. When Emerging Market losses are no longer hanging over their heads, they'll expand investments - and many have already stated they have their eyes on an entry into cryptocurrency.

"I still think it's possible, Bitcoin could end the year explosively higher." says Lee.

He estimates the rise could send BTC prices to the $25,000+ zone.

Tom Lee is a Managing Partner and the Head of Research at Fundstrat Global Advisors. He is an accomplished Wall Street strategist with over 25 years of experience in equity research, and has been top ranked by Institutional Investor every year since 1998. Prior to co-founding Fundstrat, he served most recently as J.P. Morgan’s Chief Equity Strategist from 2007 to 2014, and previously as Managing Director at Salomon Smith Barney. His areas of expertise include Market Strategy.
Author: Oliver Redding
Seattle News Desk