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Mr Lee of Fundstrat Global Advisors said there is an "important correlation" between emerging markets and bitcoin. Speaking on CNBC, Mr Lee said: “In general, we thinking mining and fundamental factors like network effect really drive bitcoin’s value. But macro factors have an effect on network value.” Mr Lee referenced a chart showing two lines - the MSCI emerging markets index relative to the S&P and bitcoin’s price. He said: “EM actually rallied into the end of the year we had a huge bitcoin rally and as EM has since fallen we have seen bitcoin fall sharply.

Bitcoin could end the year explosively higher Tom Lee

“You might wonder ‘what’s the linkage? Why do we think they’re connected?’. Well, there are two factors. “The first is hedge funds, which typically rent emerging markets stock. So they do risk on, risk off. When they are risk off bitcoin also suffers because they are risk off. “The second reason has to do with wealth effect. Wealth effect means if you’re living in an emerging market and you see your stock market fall hugely it means you have a lot less money to buy bitcoin so that affects the network effect because you can’t buy bitcoin. “So I think there’s two reason why an emerging markets index actually influences bitcoin.”

Bitcoin price: Tom Lee said bitcoin could end year "explosively higher"

The MSCI Emerging Markets Index, which is down almost 8 percent so far this year, is used to measure equity market performance in emerging global markets. Mr Lee explained the trend and later said: “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.” The bullish cryptocurrency expert said if the dollar weakens and the Federal Reserve halts its hike rate policy then both areas of the market could surge. Lastly, Mr Lee said: “I still think it’s possible.” He added: “Bitcoin could end the year explosively higher.”