SO MUCH FOR THE VIEW THAT BITCOIN IS CORRELATED TO EMERGING MARKETS

According to a recent article from Fundstrat analyst Tom Lee, the price of Bitcoin is correlated with the emerging market asset prices.  The big story in the financial markets today is the strengthening US dollar and its subsequent impact on emerging market assets.   The result of the stronger dollar has been a weakening of emerging market asset prices.  This price action is at odds with recent suggestions by Mr. Lee that Bitcoin and EM assets were correlated.  The methodology was based on the view that EM and Bitcoin are risk assets and therefore should trade in the same direction.  That view is not taking shape in th marketplace today.

Perhaps the recent bounce off the Bitcoin’s marginal cost level ($6,300), coupled with a decline in guidance for crypto mining equipment, is a more valid reason the crypto bulls are enjoying a multi-day rally in the digital currency.