Tom Lee, managing partner at Fundstrat Global Advisors, says that cryptocurrency prices do not reflect the improving fundamentals of industry as gold and silver are diverting investor capital and attention.
Lee, speaking on CNBC’s Power Lunch said that the crypto sector is still feeling the impact of an event of deleveraging on 10 October. He says this “crippled a number of key players within the industry,” such as exchanges and markets makers.
This sell-off occurred after President Trump threatened new heavy tariffs against Chinese imports and specifically targeted restrictions on rare earth metals.
The industry, he says, is “still limping along”, despite the fact that fundamentals have improved significantly.
Lee claims that the institutional attitude towards blockchain technology has changed materially.
He cites discussions held at the World Economic Forum, Davos. Wall Street is increasingly embracing tokenization, blockchains and traditional finance as a single model.
This view is supported by executives of UBS Standard Chartered, Euroclear and other firms.
Lee claims that despite these developments, precious metals have drawn capital from cryptocurrency.
He says that the precious metals move “has sucked out a lot the oxygen from the room”, adding that the crypto prices “don’t quite keep up with the fundamentals.”
Lee believes that part of this dynamic is mechanical. He says that as gold and silver increase, investors who use margins or options will allocate their capacity to metals rather than other risky assets like large-cap tech stocks or cryptocurrency.
He says that the crypto industry feels it more keenly, because they have already achieved. Lee believes that crypto could benefit from an easing Federal Reserve and weaker dollar, but it lacks the leveraged tailwinds.
He says that in the past, pauses on gold and silver rallies were preceded by surges of Bitcoin (BTC), and Ethereum (ETH).
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The post Tom Lee says Crypto not keeping up with improving fundamentals and sees precious metals sucking the oxygen out of the room may be updated as new information becomes available.
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