Fundstrat’s head of research, Tom Lee, argues that crypto may be nearing a bottom and could rebound as fundamentals strengthen
He shared this view while assessing current market conditions on CNBC, noting that improving fundamentals could act as near-term catalysts for a recovery.
Key Points
- BitMine is currently facing nearly $7 billion in unrealized losses amid the ongoing crypto downturn.
- Tom Lee attributed the decline to a strong rally in precious metals and rising policy uncertainty in Washington.
- Meanwhile, Lee believes crypto prices may be approaching a market bottom.
- He expects a rebound if underlying fundamentals continue to strengthen.
Factors Behind Crypto’s Decline
Over the past weeks, the crypto market has suffered devastating downturns. Billions of dollars have been wiped out since October 2025 after Bitcoin hit an all-time high near $126,000.
Meanwhile, Lee’s Ethereum treasury firm, BitMine, has taken a hit and is currently sitting on an unrealized loss of $6.95 billion.
Reacting, he said the recent crypto downturn has been deeper than expected, largely due to the absence of leverage in the market. He explained that crypto’s earlier deleveraging in October 2025 amplified the decline, while strong rallies in gold and silver diverted capital away from digital assets. As a result, prices weakened despite positive fundamentals.
In addition, Lee highlighted rising policy uncertainty in Washington, particularly decisions that “pick winners and losers,” among key drivers of volatility across risk markets.
Weakness May Signal a Market Bottom
However, Lee suggested that the recent pause in the gold and silver rally could ultimately benefit crypto. He believes the current weakness in crypto prices may be setting the stage for a market bottom.
He cited timing and valuation signals from a BitMine crypto adviser, who has projected that Bitcoin will fall to $77,000 and Ethereum to $2,400 since mid-November.
According to Lee, this alignment could occur this weekend, as crypto has fallen enough to drain remaining bearish momentum. Consequently, he believes the market is entering a bottoming phase rather than facing a deeper sell-off.
Fundamentals Remain Supportive for a Rebound
Notably, Lee emphasized that the fundamental backdrop remains supportive, pointing out that the U.S. economy is still in good shape. Moreover, he highlighted Ethereum’s rapidly rising active addresses, driven by Wall Street’s active development of products and infrastructure on the network, as clear evidence of strengthening fundamentals.
According to Lee, this acceleration reflects deepening institutional adoption. As a result, he projected that if these fundamentals remain intact, crypto prices are likely to follow and rebound in the near term.
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