Tom Lee, co-founder of Fundstrat Global Advisors and a well-known bitcoin bull, has recently argued a relatively unknown correlation between bitcoin and emerging markets may mean the flagship cryptocurrency will end the year “explosively higher.”

Speaking on CNBC’s “Trading Nation,” Lee noted that both emerging markets and the cryptocurrency have been in a downtrend this year after peaking earlier this year. Per his words, he expects them both to recover. He 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.

As CNBC noted, the iShares MSCI Emerging Markets Index ETF is currently down by about 8% this year, while the flagship cryptocurrency has seen its price drop over 65% from its all-time high near $20,000. At press time, according to CryptoCompare data, BTC is trading at $6,650.

When asked whether or not his prediction was counter-intuitive, given emerging market stocks have been dropping because fiat currencies in these countries have been losing value against the US dollar and people would presumably buy BTC in these situations, Lee noted the majority of trading isn’t happening in emerging markets.

Instead, he said it’s happening in counties like Japan and South Korea. Notably, however, when the South African Rand (ZAR) and the Turkish Lira (TRY) dropped earlier this month, both countries saw a surge in BTC trading volume.

The Wall Street analyst added that hedge funds aren’t currently buying cryptos or investing in emerging markets. Nevertheless, he believes the tide will turn for both, especially if the USD weakens and the “Federal Reserve slows its interest rate hike policy.”

Per his words, there’s a lot of money waiting on the sidelines of the cryptocurrency space, presumably waiting for bullish developments. Taking this into account, he once again stood by his $25,000 by the end of the year price prediction. He said:

I still think it's possible. Bitcoin could end the year explosively higher.

Lee, as CryptoGlobe covered, has in the past blamed bitcoin futures contracts for the cryptocurrency market’s “gut-wrenching” drop, as he believes institutional investors didn’t invest in the cryptocurrency over the lack of proper tools.

Earlier this year Lee predicted BTC would surge as much as 70% after the Consensus conference over its rising attendance. His prediction failed as the cryptocurrency actually dropped from about $10,000 to $8,000. He owned up to his failed prediction, and noted the cryptocurrency failed to rise over the lack of regulatory clarity.