Fundstrat managing partner Tom Lee believes Bitcoin and Ether are poised to play catch-up once the blistering rally in gold and silver begins to cool, arguing that crypto fundamentals remain intact despite recent underperformance.
Key Takeaways:
- Tom Lee says Bitcoin and Ether could rally once the surge in gold and silver fades.
- He argues crypto is lagging due to deleveraging and investor FOMO shifting toward precious metals.
- Despite price weakness, Lee believes crypto fundamentals have improved since October.
Speaking on CNBC’s Power Lunch on Monday, Lee said digital assets should typically benefit from a weaker US dollar and a Federal Reserve that is moving closer to easing.
However, he noted that crypto markets have lacked a key driver this cycle as leverage across the industry has been largely wiped out.
Tom Lee: Gold and Silver FOMO Is Holding Back Crypto
“Crypto doesn’t have the leverage tailwind because the industry delevered,” Lee said, adding that as long as gold and silver continue to surge, investors are chasing metals instead.
“There’s a FOMO into buying that instead of crypto,” he said. Historically, Lee argued, periods where precious metals pause have often been followed by sharp rallies in Bitcoin and Ethereum.
The divergence has been stark in recent weeks. Gold prices hit a record high of $5,100 on Monday, extending gains to roughly 17.5% since the start of the year.
Silver has moved even more aggressively, climbing 57% year-to-date to peak at $110.
Analysts have linked the surge in precious metals to heightened geopolitical tensions, trade tariff threats and sustained weakness in the US dollar, all of which have driven investors toward traditional safe havens.
Lee said crypto markets are still dealing with the fallout from a major deleveraging event on Oct. 10, which he described as having “crippled many key players” across exchanges and market makers.
While the sector is “limping along,” he said the underlying fundamentals have improved meaningfully since then.
Bitcoin has struggled to reflect those fundamentals. The largest cryptocurrency is down roughly 30% from its October high and has failed to regain momentum above the $95,000 level, recently sliding back toward support near $86,000.
“The precious metal move has sucked a lot of the oxygen out of the room,” Lee said, adding that prices are lagging fundamentals rather than signaling deeper weakness.
Tom Lee-Linked Firm Buys $58M in Ether as Institutional Interest Grows
Lee’s confidence in Ethereum remains evident. On Monday, BitMine, an Ether-focused treasury firm linked to Lee, purchased another 20,000 ETH for $58 million, according to blockchain analytics firm Lookonchain.
Lee also said recent discussions at the Davos forum underscored growing interest from financial institutions in building on Ethereum and other smart contract platforms.
Not all analysts agree that dollar weakness alone will lift Bitcoin. CryptoQuant analyst GugaOnChain said recent ETF outflows show investors still favor gold during periods of stress.
“For BTC to thrive,” they said, “the weakness of the American currency must come from risk appetite, not from fear.”
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