Tom Lee has asserted that Bitcoin (BTC) and Ethereum (ETH) are on the verge of stabilizing after enduring a prolonged decline, suggesting that the ongoing crypto winter is “nearing its end.” Despite his optimism, skepticism lingers due to a series of earlier unmet projections this year.
In a recent interview, Lee pointed out that deteriorating sentiment and poor price movements indicate that the market is approaching its final phase of capitulation. He referenced market strategist Tom DeMark’s technical analysis, which projects Bitcoin potentially dropping to around $60,000 and Ethereum hitting a bottom of approximately $1,890 after failing to maintain support around $2,400. Lee believes Ethereum is close to reaching this target and may require “one more undercut” before establishing a lasting low, predicting that the downturn could conclude by late April.
Lee’s renewed confidence comes amidst a turbulent start to the year for digital assets, with Ethereum and Bitcoin losing 60% and 45% of their value from their all-time highs, respectively. His past forecasts, predicting Bitcoin to exceed $150,000 by year-end and Ethereum to reach between $7,000 and $9,000 by January, did not materialize, resulting in significant backlash on social media and questions about his credibility. Critics have noted his earlier bullish projections, suggesting they reflect a lost credibility for his bottom calls.
Additionally, Lee discussed the reasons behind Bitcoin and Ethereum’s struggles in the current market environment, especially as gold and other risk assets have appreciated against the U.S. dollar. He posited that gold’s rise has created a “FOMO” effect, siphoning capital away from cryptocurrencies. Lee emphasized that the scale of gold has become more apparent to investors, leading to daily price moves that can overshadow those in crypto.
Fundstrat has identified five key drivers behind gold’s recent rally, two of which Lee argued are detrimental to crypto. He pointed out that both easing monetary policy and geopolitical uncertainty typically support both asset classes, but factors like momentum-driven buying and fears surrounding the global monetary system may lead investors to favor gold over cryptocurrencies.
On a more positive note, institutional interest in BitMine, the Ethereum-focused treasury company that Lee chairs, has been growing. BlackRock recently increased its stake in BitMine by 166%, amounting to approximately $246 million, and Cathie Wood’s Ark Invest has also acquired over 200,000 shares in recent days. This continued accumulation by major asset managers signals robust Wall Street interest in Ethereum-based strategies despite prevailing pressures on crypto prices.
Lee has frequently highlighted increasing institutional validation of Ethereum’s role in the financial landscape, noting that institutions like Amundi, Europe’s largest asset manager, are already building on the Ethereum blockchain. He remarked on social media that the list of institutions involved in Ethereum’s infrastructure includes some of the most esteemed names in finance.
