Fundstrat managing partner Tom Lee predicts that cryptocurrency markets will likely catch up as gold and silver begin to take a break from recent gains.
Tom Lee he said during CNBC’s Monday Power Lunch, this cryptocurrency is expected to rise on a weaker dollar and Federal Reserve easing.
But there is not enough leverage because the industry has de-selected, “and as long as gold and silver are rising, there is FOMO that is buying that over cryptocurrencies,” he said.
“Because when gold and silver take a break, then and in the past, it would later lead to a surge in Bitcoin and Ethereum.”
Gold prices hit an all-time high of $5,100 on Monday, after rising 17.5% year-to-date. Silver also soared, reaching a high of $110 at the same time, after gaining 57% this year.
Market observers attributed the rise in precious metal prices to rising geopolitical tensions, trade tariff threats and weakness in the U.S. dollar, prompting investors to look for safe and sound assets.
October’s crash continues to hurt markets
Earlier in the interview, Lee explained that markets were still feeling the effects of the deleveraging event that took place on October 10, which “kept many key players in the industry,” including exchanges and market makers. As a result, he said, the industry “is limping along, but the fundamentals have improved a lot.”
Bitcoin (BTC) has lost 30% of its value since its October high and is struggling to find momentum above $95,000 after returning to support at $86,000 on Monday.
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“I think the precious metals movement has sucked a lot of the oxygen out of the room,” Lee said.
“So I think cryptocurrency prices don’t quite keep up with the fundamentals, but as you know, when the fundamentals go up and to the right, the prices eventually follow.”
Meanwhile, BitMine, Tom Lee’s Ether (ETH) treasury company, bought another 20,000 ETH for $58 million on Monday, According to to Lookonchain.
The Davos event also “underlined that financial institutions intend to build on Ethereum and smart blockchains” – Lee he said on X
Bitcoin needs risk appetite, not fear
However, CryptoQuant analyst “GugaOnChain” he said on Monday, the weakness of the dollar does not automatically mean an augment in the value of Bitcoin.
“The flight from the dollar to gold while Bitcoin ETFs experience massive outflows proves that in moments of panic, salvation is classic, not digital,” they said.
“For BTC to thrive, US currency weakness must be driven by risk appetite, not fear.”
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