Crypto Rally Expects Gold and Silver Freezing.
Tom Lee, managing partner at Fundstrat, predicts that the crypto markets will be caught as gold and silver begin to take a break from their recent rallies.
Tom Lee said on CNBC's Power Lunch on Monday that crypto should go on a weak dollar and Federal Reserve easing.
However, the industry lacks tailwind power, he said, “as long as gold and silver are going up, there's FOMO to buy that over crypto.”
Because when gold and silver take a break and before that, this leads to an increase in Bitcoin and Ethereum.
Gold prices rose above $5,100 on Monday, following a 17.5% gain since the start of the year. Silver has also skyrocketed, after gaining 57% this year to hit a high of $110 at the same time.
Market watchers attribute the rise in precious metals to rising geopolitical tensions, trade tariff concerns and the weakness of the U.S. dollar, prompting investors to move to safe-haven assets.
The October crash is still affecting markets.
Earlier in the interview, Lee said markets were still feeling the ripple effects of the Oct. 10 incident, which “paralyzed many key players in the industry,” including exchanges and market makers. As a result, the industry is “continuing, but the fundamentals have improved a lot,” he said.
Bitcoin (BTC) has lost 30% of its value since its October peak and is struggling to regain momentum above $95,000, tanking to support at $86,000 on Monday.
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“I think the noble metal movement took a lot of oxygen out of the room,” Lee said.
“So I think crypto prices are inconsistent with fundamentals, but as you know, when fundamentals go up and to the right, prices will eventually follow.”
Meanwhile, Tom Lee's ether (ETH) treasury firm BitMin bought another 20,000 ETH for $58 million on Monday, Lookonchain reported.
The Davos event also saw “prominent financial institutions set to build on Ethereum and smart blockchains,” said Lee at X.
Bitcoin needs appetite, not risk
However, CryptoQuant analyst “GugaOnChain” on Monday said that the weakness of the dollar does not automatically mean that Bitcoin will rise.
“The flight from the dollar to gold, with bitcoin ETFs experiencing high inflows, proves that the safe haven in times of panic is classical, not digital,” he said.
“For BTC to prosper, the weakness of the US currency must come from risk appetite, not fear.”
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