The direction of crypto prices could inform the trajectory of the U.S. stock market, according to Tom Lee, Fundstrat Global Advisors’ head of research. Bitcoin on Thursday declined to levels not seen since April 21 , amid a broader market pullback that saw investors rake in profits from risk-on assets as hopes of an upcoming Federal Reserve interest rate cut lessened . Major U.S. indexes closed lower on Thursday, reversing earlier gains, as heavyhitter tech stocks lost steam even after Nvidia’s strong third-quarter results . The crypto and AI trade are closely linked, as investors who have significant holdings in AI-related stocks tend to also hold bitcoin. Lee sees further declines to come for crypto assets, which could indicate further pain in stocks, but he remains optimistic for a comeback longer term. “The crypto market has been limping along since Oct. 10, because on that date was a negative shock,” Lee said Thursday on CNBC’s “Power Lunch.” “I think that this drip that’s been taking place for the last few weeks in crypto reflects this market maker crippling. And in 2022, it took eight weeks for that to really get flushed out. We’re only six weeks into it … I think crypto, bitcoin and ethereum are in some ways a leading indicator for equities because of that unwind and now this sort of limping and weakened liquidity.” BTC.CM= 6M mountain Bitcoin over the past six months Lee recalled the sudden crash in crypto prices that took place on Oct. 10, which was caused by an escalation in U.S.-China trade sentiment and also influenced by structural factors such as high leverage in crypto derivatives. More than 1.6 million traders saw a combined $19.37 billion erasure of leveraged positions over 24 hours beginning that day, making it the largest ever liquidation event tracked by data analytics firm CoinGlass, CNBC previously reported . Bitcoin prices have fallen since peaking above $126,000 in early October, and the crypto market slide has spread to other pockets. For example, ether is currently trading below $2,900. However, Lee remains bullish that the bottom in crypto prices appears on the horizon. “When we look at those prior corrections, even bitcoin in the last few years … each of them had the recovery, the rise from the low was faster than the drip to the bottom,” Lee told CNBC. “The recovery from there to all-time highs will be faster than the decline. That’s what happened in every crypto decline, because what you have is all the spooled up energy. People are sitting and waiting and there’s panic selling, forced sellers, but the buyers are being patient. That’s what will happen.”
Fundstrat’s Tom Lee says crypto is a ‘leading indicator’ for U.S. stock prices
Nov 20, 2025
