Key Insights:
- Tom Lee says the crypto market is lagging because investors are chasing gold and silver, which have surged recently.
- The October deleveraging event continues to weigh on the industry, limiting leverage and momentum.
- Analysts warn that dollar weakness driven by fear favors traditional safe havens like gold, meaning Bitcoin needs renewed risk appetite.
Gold and silver are running hot, and the crypto market has been left on the sidelines. Fundstrat’s Tom Lee said on Jan. 26 he expects a rebound in digital assets once the metals rally subsides.
Reuters noted that spot gold blew past the $5,100-per-ounce mark for the first time ever, driven by all sorts of geopolitical nerves rattling investors.
Silver joined the party too, blasting through $100 and peaking around $117.69 at one stage before settling back near $113 by the end of the day. In Lee’s view, as long as FOMO funds precious metals now, crypto prices have been “overshadowed” – but fundamentals point to a rebound when the metals retreat.
Gold’s rally has been extraordinary. The Coin Republic reported spot gold rose “nearly 18%” YTD and hit $5,110/oz on Jan. 26, fueled by safe-haven flows.
Both silver and platinum posted record levels, with silver rising to about $117. In the crypto market, Ethereum and other altcoins likewise stalled after year-end highs. For context, a Phemex market note in late Dec. 2025 put the total crypto market cap near $3.0 trillion, broadly flat.
In short, “the precious metal move has sucked a lot of the oxygen out of the room,” Lee observed, explaining why risk assets like crypto prices have lagged.
On CNBC’s Jan. 26 Power Lunch, Lee argued that the crypto market should be rising on a weaker U.S. dollar and an easing Fed. However, “as long as gold and silver are rising, there’s a FOMO into buying that instead of crypto,” he said.
In other words, investors have rotated into metals for safety, leaving crypto prices “not keeping up with fundamentals.” Lee points to history: when gold and silver paused, crypto has often run higher. “When gold and silver take a break…that would lead to a Bitcoin and Ethereum surge afterwards,” he noted.
From Macro Jitters to ETH Bets: Signals Behind Crypto’s Next Move
In his view, the current weakness is temporary. As he put it, “crypto prices aren’t quite keeping up with fundamentals, but … when fundamentals go up, and to the right, prices eventually follow.”
Lee’s call follows months of bearishness in crypto. He had previously warned of a “painful decline” early in 2026 as the industry deleveraged.
CryptoQuant analyst GugaOnChain concurs that markets are jittery: the rush from the dollar into gold “proves that in moments of panic, the refuge is classical, not digital”.
CryptoQuant adds that Bitcoin needs a genuine risk‑on backdrop, not just fear‑driven dollar weakness, to rally. The Crypto Fear & Greed index has edged out of “extreme fear,” but ETF flows for Bitcoin are still weak. In short, many traders await either a crack in the metals rally or a macro shift to trigger a crypto “catch-up” trade.
Lee’s bullish bias is mirrored in his firm, BitMine’s, actions. The NYSE‑listed Ethereum treasury BitMine disclosed on Jan. 25 that its holdings now exceed $12.8 billion. The company holds about 4.24 million ETH (roughly 3.5% of all Ether) and 193 BTC, plus $682 million cash. In recent days, BitMine added another 40,302 ETH to its vault.
In a statement, Tom Lee highlighted that Wall Street is “embracing crypto and blockchain” and noted that “Ethereum remains the most widely used by Wall Street today”.
Such moves signal that at least some institutional players expect crypto fundamentals to strengthen. The firm’s large ETH stake underlines its view that smart-contract platforms will be key in the coming months.
Crypto Prices Gear Up to Catch-Up Trade
With precious metals so overbought, a pullback may be imminent. Some analysts now expect gold to correct later in 2026 (Bloomberg reports gold hitting $5,000 by late Jan.). This scenario would remove one headwind from crypto.
Lee suggests that when metals cool, the “oxygen” will return to crypto markets. That could unfold in the coming weeks if Fed policy stays dovish and geopolitical tensions ease.
For now, crypto investors are watching both Fed and metal market developments. If Lee is right, fading safe‑haven demand could spur a multi-month rally in digital assets. It would help crypto markets finally “catch up” to their fundamentals.