After the biggest crypto deleveraging event in five years, Tom Lee, president of Bitmine Immersion Technologies, says the worst may be over – and an end-of-year rally could be in sight.
The October 10 sell-off, triggered in part by rising trade tensions between the United States and China, wiped out billions of leveraged positions in digital assets.
“This is the largest liquidation event in five years for crypto,” Lee said. “So there are still these ripple effects, two weeks later, that are plaguing the crypto market.”
Yet despite the shock, Lee – who also co-founded research firm Fundstrat – told CNBC this weekend that Bitcoin and Ethereum were showing surprising resilience, pointing to record open interest levels and improving technicals as signals that the market is stabilizing.
The deleveraging earlier this month – multiples of what happened during FTX – saw Bitcoin fall by “three or four percent,” Lee explained. Today, the technical data for Bitcoin and Ethereum are “positive”.
At last check on Sunday, Bitcoin was trading at around $113,500. See the table below.
Lee argues that crypto often acts as an early signal for stocks and broader market liquidity. He says Bitcoin’s stability and Ethereum’s growing on-chain activity, particularly through the use of stablecoins on Layer 1 and Layer 2 networks, suggest improving fundamentals that could translate into broader risk sentiment across asset classes.
Lee’s comments come as JPMorgan plans to allow institutional clients to use Bitcoin and Ether as collateral for their loans by the end of the year. The move, which will rely on third-party custodians, marks another step in the reshaping of crypto on Wall Street, especially with the Trump administration loosening regulatory screws.
It’s coming full circle for CEO Jamie Dimon, who once called Bitcoin a “pet rock.” Now that same “rock” can get a multimillion-dollar loan from the nation’s largest bank.
“It really helps to see JPMorgan saying they are open to the idea of using crypto as collateral,” Lee added. With the improvement in fundamentals, he calls for “a fairly significant movement between now and the end of the year”.
