Crypto Entering 'Really Bullish' 12 Months, Tom Lee Says

Fundstrat co-founder Tom Lee believes cryptocurrency investors could be entering an exceptionally strong 12-month period. 

He argues that the market has already flushed out much of its excessive leverage. 

The historically important four-year cycle is approaching its expected bottom.

Lee recently said that the next 12 months should be “really bullish” for crypto. The strategist pointed to last October’s deleveraging and the approaching four-year-cycle trough.

“The start of a much larger move”

Lee believes that the fundamental backdrop for cryptocurrencies has continued to improve even while prices went through a prolonged downturn.

“Our take this year has been crypto fundamentals have been strengthening, which is a real contrast to past crypto winters, where those were marked by closures, the absence of capital and then dwindling use cases,” Lee said.

He pointed specifically to the growing adoption of tokenization by major financial institutions.

“We know tokenization is gaining a lot of traction. So many high-profile major financial institutions are building tokenized products, particularly on Ethereum,” he said.

The increasing capabilities of artificial intelligence could represent another major source of demand for blockchain infrastructure, according to Lee.

“We know that as AI capabilities grow, it’s becoming very, very obvious that AI agents don’t want to use traditional financial systems, and so crypto rails make a lot of sense.”

Lee therefore described the recent sharp crypto rebound as a “course correction” rather than merely another short-lived rally.

“The price is finally starting to recognize that we shouldn’t be in a deep crypto winter,” he said.

Trying to catch the exact bottom could backfire

Lee also warned investors against attempting to perfectly time the market bottom.

“If you look at the past crypto cycles and you could buy the crypto either four weeks before or one week after the low, would you do that every day? And the answer is everyone should obviously be buying four weeks before the low or one week after the low,” he said.

Under either scenario, Lee believes investors are already entering an attractive part of the cycle.

“If the low was last week, then you’re buying one week after the low. If there is a retrace, which is possible, then you’re buying four weeks before the low.”

Attempting to wait for definitive confirmation could instead mean missing a substantial portion of the eventual rally.

“If anyone’s trying to time the bottom and do what I call buy the middle leg of the rally, they’re going to miss the majority of the gains,” Lee said.