As trade disputes are dominating the headlines and both China and the US are at the later stages of an economic cycle, some level of volatility is expected. The emerging markets include a considerable set of economies that are present at various phases of the economic cycle. Long-term trends like the development of mobile commerce, growing usage of smartphone and an increasing consumer class seem sustainable. The most important thing is that earnings are expanding for a massive swath of organizations and costs for certain industrial metals and oils ought to help export-led countries.
The traditional markets are facing tremendous challenges post a robust two-year rally, which includes political election controversy in Latin American nations, Global trade tensions, and a strengthened US dollar have contributed to a 7% weakening year for the MSCI EM (Emerging Markets) Index. As EM fundamental remain integral, but more volatility is expected as markets digest trade tensions and interest rate changes.
How are the market trends going to affect the Bitcoin market?
According to Fundstrat’s BTC analyst Tom Lee, there is a massive chance of getting cryptocurrency to be explosively higher. Lee held this opinion while citing a connection between bitcoin and the developing markets. He made this new prediction during an interview on the 25th of August on the “Trading Nation” show on CNBC. The head of the Research at Fundstrat Global Advisors said that he assumes that the price of bitcoin would soar as high as $25,000 this year. Lee has grounded this assumption on the association of the cost of BTC and BlackRock’s iShares MSCI ETF (Emerging Markets exchange-traded fund. This tracks the mid-sized and large-sized companies in today’s emerging markets.
According to Lee, this vital correlation is grounded in the fact that both these markets run parallel to each other. Again, both enjoyed peaked phases during early 2018, and both have been witnessing a downward trend from then onwards. Based on the statements of Lee, the current trading activity proves that the private funds have stopped purchasing into funds that are tangled to the current markets because of the market sell-off risks and this, in turn, results in a decrease in Bitcoin trading.
Lee believes that an alteration in the direction of the developing markets will indicate a similar modification in Bitcoin’s trend too. Following this change, he anticipates increased Bitcoin trading, especially because of the ease with which interested investors can enter the market using crypto trading apps such as Crypto Code, making the barrier to entry almost non-existent.
During an interview, Lee said that the tide is going through a massive transformation for both the emerging markets and the Bitcoin market, and this turns particularly true when the Federal Reserve of the US decelerates down its interest rate. In July, Lee enunciated his stance that Bitcoin is assumed to reach anywhere between $22,000 and $25,000 towards the end of 2018. Previously this month, Lee stated that Bitcoin couldn’t be viewed as “broken” as long as it continues to keep the present levels of volatility and price. At that time, he cited the numbers reflected by Fundstrat’s BMI (Bitcoin Misery Index). This tool measures the miserable situation of the Bitcoin investors grounded on the price and the volatility of the crypto market.