In a week when digital assets looked battered by macro shocks, one prominent market voice insists the crypto story is far from over. Instead of signaling collapse, the recent selloff may be nothing more than a violent—but temporary—weather event.
According to Tom Lee, co-founder of Fundstrat, the roughly 50% retracement in Bitcoin should not be mistaken for the onset of another prolonged “crypto winter.” Speaking on CNBC’s The Exchange, Lee described the current environment as a “crypto squall”—a sharp macro-driven storm rather than a structural breakdown in blockchain adoption.
A Market Shaken by Policy Whiplash
The turbulence began after the Supreme Court of the United States struck down most of President Donald Trump’s emergency tariffs. Markets initially celebrated the decision, interpreting it as a limit on executive authority and a potential reduction in trade uncertainty.
“Investors are generally relieved,” Lee explained, noting that the ruling created a divide between industries directly exposed to tariffs and those largely insulated from them.
Technology, software, and crypto fell into the latter camp—seemingly poised to benefit from the easing policy cloud.
But the calm didn’t last long.
Within days, new trade measures surfaced under Section 122 of the Trade Act, pushing duties up to 15% and reigniting a classic risk-off rotation across global markets.
Capital Runs to Safety as Crypto Slides
As geopolitical and trade tensions resurfaced, investors rushed toward traditional hedges:
Gold surged past record levels above $5,160 per ounce.
Silver climbed near $88.
Mining stocks rallied sharply as commodities reclaimed their role as crisis-era refuges.
Meanwhile, Bitcoin slipped below $65,000, and the broader digital asset market erased more than $100 billion in value in just 24 hours.
To many observers, the selloff looked ominously familiar.
Lee disagrees.
Why This Doesn’t Look Like Past Crypto Busts
Historically, Bitcoin has suffered drawdowns of roughly 50% on seven different occasions—some preceding deep bear markets. Yet Lee argues this cycle is behaving differently.
Rather than a euphoric top followed by a sudden crash, the market is enduring:
A slow, psychologically draining decline
A rotation of speculative capital into metals
A macro-driven reallocation, not a technology-led failure
“We’re experiencing the classic bear market blues,” Lee said. “Non-euphoric tops lead to grinding retracements, not instant collapses.”
In other words, this isn’t panic—it’s fatigue.
Adoption Metrics Tell a Different Story
While prices wobble, underlying crypto activity continues to expand:
Ethereum’s daily transaction counts have shown parabolic growth.
Tokenization initiatives—from real-world assets to financial instruments—are accelerating.
Wall Street integration into digital infrastructure continues to deepen.
Lee believes these signals suggest the asset class is maturing beneath the surface, even as speculative demand temporarily migrates elsewhere.
“Crypto is suffering mainly because gold has done so well,” he noted, adding that traders chasing high-frequency opportunities have gravitated to metals instead of digital assets.
The Federal Reserve Could Become Crypto’s Unexpected Ally
Another key variable may soon reshape the narrative: monetary policy.
If tariffs dampen inflation while the labor market softens, the Federal Reserve could gain room to cut interest rates—historically a tailwind for risk assets, including cryptocurrencies.
Such a shift would mark a stark contrast to the tightening cycle that pressured digital assets over the past two years.
Opportunity in the Eye of the Storm?
Lee’s central message is simple: markets are reacting to macro crosscurrents, not abandoning crypto’s long-term thesis.
“This isn’t a collapse; it’s a squall,” he concluded. “For investors who understand historical cycles, crypto remains very much in play.”
As traders digest the twin shocks of court rulings and renewed tariff escalation, the coming months may determine whether digital assets can stabilize while traditional safe havens absorb the fear trade.
If Lee is right, the rules governing past crypto bear markets may no longer apply—and what feels like chaos today could ultimately mark a transition into the sector’s next phase of institutional maturity.