While breaking down a comparison chart between the emerging market index and bitcoin returns on CNBC’s Fast Money, Lee noted that the two major factors seemingly drive the connection.
The first is hedge funds — see hedge funds typically rent emerging market stocks. So they do risk-on, risk-off. So when they’re risk-off, Bitcoin also suffers because they are risk off. The second reason has to do with wealth effect. Wealth effect means that if you are living in an emerging market, and you see your stock market fall hugely, that you will have a lot less money to buy Bitcoin.
Lee even went on to double down on his previous 2018 price prediction of $25,000, saying that he believes Bitcoin could surpass $20,000 in just a matter of days once the next bull run kicks-in.
It only takes ten days for Bitcoin to see all its returns in a year. So I still believe that is possible.
However, it is important to note that any trading recommendations made on CNBC should be taken with a grain of salt. In the case of Bitcoin, CNBC’s predictions have turned out to be 95% accurate… as a counter trade indicator. This means that 95% of the time that CNBC makes a price call, taking the opposite trade will give investors positive returns.
Nonetheless, the price action of Bitcoin has improved over the past week, and it currently stands at $6,700. This relatively bullish week has come as altcoins continued to slump, which has driven Bitcoin to a 56.3% market dominance within the AltDex 100 Index (ALT100), a benchmark index for large-cap cryptocurrencies and tokens.
Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.