Emerging Markets Are the Biggest Determinant of Bitcoin’s Price Movement: Fundstrat’s Tom Lee Mining and network effects affect the price of Bitcoin, but according to Tom Lee, the biggest determinant of Bitcoin’s price movement is the emerging markets. Nov 26, · Emerging Markets Are Voting For Bitcoin As A Better Financial System Bitcoin is the answer, is a phrase thrown around for nearly everything, to . At various times during the past decade, both Bitcoin and emerging markets stocks have enjoyed substantial gains. Yet, at times, each has also endured some savage beatings from Mr. Market. So let’s examine the performance of Bitcoin vs. emerging markets stocks, examining the relative strengths and weaknesses of these two key financial markets.
Emerging markets and bitcoinBitcoin vs. Emerging Markets Stocks | Which Asset Is Better for You?
However, these volatile stocks can also decline in value at a rapid pace, causing serious portfolio drawdowns. Given these realities, trading a basket of diversified EM stocks via EEM may result in a somewhat smoother portfolio equity curve. Adding EEM to your investment portfolio may offer you the following advantages:. Yet, EEM has managed to accomplish this astounding feat once again:.
Will this bottoming process lead to another buying opportunity? Image: MotiveWave Ultimate. Chance might appear to favor a tradable rally in the days ahead, but only time will tell. Remember, just because a chart pattern repeats over and over and with a successful investment result , the outcome of any trading or investment opportunity is a purely random outcome, not connected to any series of winners or losers that preceded it.
This is why you never bet the ranch on any one trade setup or market, no matter how bullish or bearish the opportunity may present itself as. Without going into a complete tutorial here, the Bill Williams Alligator the three displaced moving averages on the chart indicator does an outstanding job of helping you confirm both trading range and trending markets. If your trading platform offers the Alligator, then, by all means, spend some time learning how to use it.
You will likely find it to be a go-to technical tool from now on. When one rallies, the other may stagnate or even go the other way. Sometimes, one market trades in a narrow range, even as the other trends strongly. Image: NinjaTrader 8. At the moment, both Bitcoin and EEM look poised for rallies, but their respective timing and durations are, of course, unknowable.
An obvious tipoff of an emerging rally is the appearance of wide-range breakout price bars and above-average trading volumes. If you plan to buy either market, be sure to keep your per-trade risk small, at 2 percent of your account value or less.
Consider balancing out your cryptocurrency investment portfolio with a variety of other non- or inversely correlated financial instruments such as gold, tech stocks, real estate, and emerging markets stocks. You may not get the thrill of seeing your Bitcoin-only portfolio rally by percent well, someday. However, neither will you suffer the horror and dismay of another 85 percent Bitcoin drawdown, even as other asset classes appreciate in value or experience only minor declines.
Compared to Lebanon, Nigeria has been doing well economically for a long time. Relatively, of course. Despite all the growth, Nigeria also has problems, especially monetary. The situation is similar in another beautiful country on the other side of Africa, in Kenya. Kenya has experienced inflation below five percent for only four years since and, like Nigeria, often experiences double-digit inflation. Even on other continents, the savings of entire populations are in danger.
There is not much need to talk about a socialist paradise in Venezuela. The notoriously bankrupt Argentina is in trouble again, which would probably be the case even without the new coronavirus. There are also problems with high inflation in populous Pakistan or in Ukraine. And finally, prices continue to rise even in the home country of your Trezor , the Czech Republic.
These are real problems faced by real people. And the problems stretch further than just making your travels more expensive. In a globalized world, things are cheap because they are bought and sold all over. If you buy stuff sold in a foreign currency while yours weakens, things become more expensive for you. It is best seen in Bitcoin, of course. Given the high price growth in Turkey, this would not be enough to maintain the value of your savings, but you would be much, much better off than a neighbor who did not buy Bitcoin.
Neighboring Syria knows this. Through a combination of sanctions, coronavirus, the crisis in Lebanon and, of course, the war, it has entered a deep recession. Dollars cannot be bought easily and, even if they can, they fetch a price much higher than officially stated. The situation in Syria is so bad that they are even talking about the possibility of switching its pound for the falling Turkish lira.
Unfortunately, next to nobody wants to sell you Bitcoin for your Syrian pounds or Turkish liras, so the purchase will, sooner or later, be done through US dollars, if they are available.
That is why we do not see such a massive flight to Bitcoin in countries with collapsing currencies as we would expect. Nor are they turning to gold, even, or other preservers of value. Especially in countries like Venezuela, where people are becoming poorer every day, it is naive to imagine buying Bitcoin on a large scale although some do.
Others do not trust it. For those of us who live in the developed world, this may seem unimaginable. Our central banks often have the opposite problem — they fail to devalue money even at the rate they want.
For example, between the crisis and , the European Central Bank achieved an average inflation of 1. It has an infinite number of costs everywhere possible, but still — money here remains relatively stable compared to emerging markets. For most of us, Bitcoin is a brilliant economic experiment, the technological innovation of the century, an interesting investment, something we can play with, the easiest means of access to markets that were previously only accessible to those with Wall Street ties.
Some of us see Bitcoin primarily as a Plan B for if or when our financial system collapses. And it is slowly collapsing. But there are hundreds of millions of people in the world living in countries whose economies have already collapsed. Well, excluding the Czech Republic. Even with notoriously bad currencies, however, periods of high inflation alternate with periods of relative stability. It is important that people confronted with the bad policies set by their governments and central banks have somewhere to escape to when the situation stabilizes, when they begin to fear that things will get worse again.
Historically, people have sought security and store of value in precious metals and precious stones, but times have changed. And the change has been significant. We are more digitalized. After all, even precious metals and precious stones are nowadays usually not owned physically, but digitally. Bitcoin is tailored to the future. Everything you possess can be held on a piece of paper or better yet, metal and kept safe on a Trezor so you can access your finances anywhere in the world, without anyone asking you for anything.
It is no coincidence that we are talking about emerging economies here. Not only Nigeria, but others too have an extremely young population that is more open to new technologies. Plus, they have something to run from — inflation. And, sometimes, cruel governments. While just a few years ago we had to run on foot, today we can run from the consequences of the actions of our governments and central banks from the comfort of our mobile phones.
And almost everyone in the emerging markets has a mobile phone.