Fundstrat’s Tom Lee believes the crypto market will stage a comeback once the explosive rallies in gold and silver begin to cool. He argues that capital rotation, not weak fundamentals, explains why digital assets lag behind other macro trades. Lee shared this view during a recent CNBC appearance, where he pointed to a shifting investor focus rather than structural weakness in the crypto sector.
Lee notes that crypto assets usually benefit from a weaker dollar and a more accommodative Federal Reserve. However, he says the industry is still feeling the aftershocks of the heavy deleveraging that hit markets months ago. As a result, traders hesitate to use leverage aggressively, which slows upside momentum. At the same time, investors chase metals during uncertainty, just as they did during earlier cycles. A similar dynamic surfaced during events covered in Bitcoin market volatility spikes amid macro stress, and Ethereum adoption grows among institutions, where macro conditions shaped crypto flows.
Precious metals steal the spotlight
Gold has reached new highs, and silver has registered enormous gains in the year to date. Investors have turned to these traditional safe-haven assets due to geopolitical tensions, tariff worries, and weakness in the US dollar. According to Lee, the “oxygen drain” phenomenon causes the speculative momentum to shift away from crypto. He thinks that once precious metals have a chance to consolidate, traders will return to Bitcoin and Ethereum, which tend to follow precious metals as they take a breather.
Lee is also of the opinion that the fundamentals of crypto are constantly improving. He says that the level of activity, institutional participation, and development of infrastructure are all showing steady increases. His company’s Ether-based treasury management product has even added more ETH recently, which is a clear indication of long-term commitment.
Risk appetite must return
Not all analysts share Lee’s positive outlook. Some on-chain analysts believe that a lack of dollar strength is not a sufficient condition for a crypto market rebound. They believe that fear-driven capital flows prioritize traditional safe-haven assets first. On-chain data platforms such as CryptoQuant indicate that ETF outflows can still negatively impact Bitcoin prices during risk-off periods. Analysts also monitor macroeconomic indicators on CNBC, where analysts typically correlate gold strength with defensive strategies over growth strategies.
Some analysts believe that Bitcoin requires a revival of risk appetite rather than just changes in currencies to succeed. They believe that when investors are optimistic, they will invest in cryptocurrencies. When fear prevails, they will turn to gold. Lee understands this cycle but is confident that crypto markets will eventually price in better fundamentals.
Lee believes that the current state of crypto markets is that they “limp along” but are on a sounder foundation than before. Once metals calm down and leverage is rebuilt, he believes that Bitcoin and Ethereum will quickly close the gap. This stage is a temporary pause, not a peak, in the crypto market cycle, according to Lee.
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