Tom Lee Ascribes Ethereum’s Pain to Market-Makers, Not the Fed | US Crypto News
Welcome to the US Crypto News Morning Briefing—your important rundown of the most vital developments in crypto for the day forward.
Grab a espresso and settle in, as a result of the newest crypto pullback might not be what it appears, at the least in accordance to BitMine chair Tom Lee. Beneath the headlines and market jitters, a much more sudden pressure could also be driving Ethereum’s hunch, one which has little to do with the Fed, and every little thing to do with crypto’s personal plumbing.
Crypto News of the Day: Tom Lee Warns of ‘Crypto QT’ as Ethereum Enters a Supercycle Setup
Ethereum could also be affected by one in all its sharpest drawdowns of the year, however Fundstrat’s Tom Lee argues the actual offender will not be the Federal Reserve (Fed). Rather, it’s a sudden liquidity shock inside crypto itself.
Speaking in a brand new interview, Lee stated the October 10 washout unleashed the largest liquidation occasion in crypto historical past, wiping out gamers and doubtlessly crippling key market-makers, creating what he calls a type of “crypto QT.”
According to the BitMine chair, the market’s weak point stems from a mix of macro worry and inner structural stress.
“There was this huge liquidation occasion on October 10. One that basically was a bigger liquidation occasion than something seen in historical past,” he explained. At the similar time, crypto’s sensitivity to the interest-rate outlook has saved merchants skittish. “If you find yourself with a hawkish Fed, it will get crypto traders very nervous.”
However, for Ethereum particularly, Lee believes the extra vital issue is the quiet disappearance of essential liquidity suppliers following the wipeout.
“It does have the indicators of that perhaps a market maker or two truly is unable to present market liquidity, and as you recognize, as liquidity contracts, it’s the similar factor as the central financial institution tightening. So it’s nearly like Crypto Qt,” he stated.
This inner liquidity drought, Lee argues, is why costs have lagged. “It does take just a few weeks for the trade to kind of discover its footing, and I feel that’s why crypto costs have lagged right here.”
Ethereum’s Supercycle Is Still Intact, Lee Says
Despite the stress, Lee stays adamant that Ethereum is in the early phases of a long-term Supercycle. Perhaps this is the reason BitMine continues to accumulate, as reported in a current US Crypto News publication.
He factors to surging exercise throughout stablecoins, RWA tokenization, prediction markets, and rising digital id rails, most of which rely upon Ethereum or its Layer 2 ecosystems.
“Ethereum is a brilliant contract platform… It’s actually the rails the place I feel a variety of issues are going to be constructed,” he stated. “Stablecoins… prediction markets… and now discuss tokenizing extra than simply {dollars}, however equities, actual property, and various property… these are all rising.”
To Lee, these knowledge factors reinforce the thesis that it’s a story that’s nonetheless in the earliest phases and one in all the explanation why BitMine considers it an excellent cycle. Bitwise CIO Matt Hougan echoed that view, calling the present setting a uncommon entry level.
“I feel no matter what occurs on the financial system in the subsequent 12 months, steady cash will develop tremendously… tokenization will perhaps 10x in the subsequent few years… prediction markets are going to be large… decentralized id and digital id are going to be large,” he stated.
For traders wanting long-term, he added, “it actually is sort of a present.”
A Bitcoin Breakout Could Reset Sentiment
One open query stays whether or not Bitcoin has already peaked for the cycle. Lee stated the reply will form how traders interpret the subsequent 12 months.
“If Bitcoin makes a brand new high this 12 months, then it actually obviates the reality that there’s a four-year cycle.”
He expects broader market energy to carry into year-end, serving to push Bitcoin again to all-time highs. In different phrases, the ache could also be actual, however the cycle is way from over.
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Here’s a abstract of extra US crypto information to comply with in the present day:
- Think BlackRock is bullish on Bitcoin? Arthur Hayes says they’re not, right here’s why.
- Grayscale and Bitwise Dogecoin ETFs may launch inside days as the SEC assessment clock ticks.
- Bitcoin ETF outflows persist: Whales feast and retail vanishes.
- Largest company Solana holder transfers 1.8 million SOL to Coinbase—Is a sell-off coming?
- Crypto’s new regular: Another $1 billion liquidation day shakes the market.
- Markets stumble as December rate-cut odds collapse forward of FOMC minutes.
- Is this week the turning point for Bitcoin? Tom Lee and Matt Hougan say a backside is close to.
- Why is the XRP price falling even after the profitable launch of the XRP ETF?
Crypto Equities Pre-Market Overview
| Company | At the Close of November 17 | Pre-Market Overview |
| Strategy (MSTR) | $195.42 | $194.06 (-0.70%) |
| Coinbase (COIN) | $263.95 | $261.50 (-0.93%) |
| Galaxy Digital Holdings (GLXY) | $25.04 | $24.80 (-0.96%) |
| MARA Holdings (MARA) | $11.51 | $11.42 (-0.78%) |
| Riot Platforms (RIOT) | $13.88 | $13.78 (-0.72%) |
| Core Scientific (CORZ) | $14.79 | $14.60 (-1.28%) |
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