Fundstrat managing partner Tom Lee has forecasted that Bitcoin and Ethereum are positioned for a significant rally once the current blistering surge in gold and silver prices begins to fade. Speaking on CNBC's Power Lunch on Monday, Lee argued that cryptocurrency fundamentals remain strong despite recent underperformance, which he attributes to investor capital being diverted to precious metals.
Lee explained that the crypto market is currently "lagging due to deleveraging and investor FOMO shifting toward precious metals." He noted that a major industry-wide deleveraging event on October 10 "crippled many key players" across exchanges and market makers, removing a traditional tailwind for crypto prices. "Crypto doesn't have the leverage tailwind because the industry delevered," Lee stated, adding, "There's a FOMO into buying [metals] instead of crypto."
Recent price action highlights the divergence. Gold hit a record high of $5,100 on Monday, up roughly 17.5% year-to-date. Silver has surged even more aggressively, climbing 57% year-to-date to peak at $110. Analysts link this rally to geopolitical tensions, trade tariff threats, and sustained U.S. dollar weakness, driving investors toward traditional safe havens.
Lee's historical analysis suggests that periods where precious metals pause have often been followed by sharp rallies in Bitcoin and Ethereum. He maintains that while the crypto sector is "limping along" post-deleveraging, its underlying fundamentals have "improved meaningfully" since October. Bitcoin, however, is down roughly 30% from its October high and has struggled to hold above $95,000, recently sliding toward $86,000 support. "The precious metal move has sucked a lot of the oxygen out of the room," Lee said, characterizing current prices as lagging fundamentals rather than signaling deeper weakness.
Lee's confidence in Ethereum is underscored by action from BitMine, an Ether-focused treasury firm linked to him. On Monday, BitMine purchased another 20,000 ETH for $58 million, according to blockchain analytics firm Lookonchain. Lee also pointed to growing institutional interest, citing recent discussions at the Davos forum about financial institutions building on Ethereum and other smart contract platforms.
Not all analysts share Lee's view that dollar weakness alone will lift Bitcoin. CryptoQuant analyst GugaOnChain noted that recent ETF outflows indicate investors still favor gold during periods of stress, arguing, "For BTC to thrive, the weakness of the American currency must come from risk appetite, not from fear."
