Tom Lee: The crypto market is dragged down by deleveraging; the parabolic rise of cryptocurrencies usually follows closely behind precious metals.
TL;DR
Tom Lee explains that cryptocurrency markets are currently suppressed by deleveraging events, but he remains optimistic, noting that crypto's parabolic rises often follow precious metals trends and Bitcoin could still reach $200,000 with regulatory clarity and institutional growth.
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According to Odaily Odaily, BitMine Chairman and Fundstrat co-founder Tom Lee stated in an interview with CNBC, "Cryptocurrencies have always been affected by deleveraging. The '10/11' crash hit the market; that was the biggest deleveraging event in cryptocurrency history. Then this week, cryptocurrencies were performing well until the 'Greenland' statement triggered volatility in Japanese government bond yields and further deleveraging in cryptocurrencies. So I think, unfortunately, cryptocurrencies should have been following gold's trend to some extent, but the effects of deleveraging must be removed, and I think that's what's really affecting cryptocurrencies."
I believe cryptocurrency remains a very important settlement layer, but this is more about smart blockchains—meaning it's more of an Ethereum story than Bitcoin. Bitcoin has recently faced some setbacks due to concerns that quantum computing could steal or compromise a third of older Bitcoin wallets. I don't think the Bitcoin story is over. It's just waiting for regulatory clarity, and institutional adoption is growing. So, I still don't think $200,000 for Bitcoin is that crazy. It's just a price doubling.
Historically, the parabolic rise of cryptocurrencies has often followed closely behind the parabolic rise of precious metals. Therefore, unless this doesn't happen in the next few years, I don't believe this is a doomed story.