BitMine’s chairman, Thomas “Tom” Lee, has weighed in on the potential reasons for the recent crypto market’s performance and why he believes the prices may be near the bottom. Related Reading: Is The Bitcoin Bottom In? CMT Reveals What Investors Need To See Now ‘All Pieces In Place’ For Crypto Market Bottom On Monday, BitMine’s chairman and Fundstrat’s CIO, Tom Lee, discussed the recent market crash that has wiped out around 13% of the crypto market’s total value over the past week. During an interview with CNBC’s Squawk Box, the executive affirmed that the crypto market’s reaction to last week’s correction has been “much worse than expected,” as most cryptocurrencies retraced to eight-month lows. Lee argued that non-fundamental factors are responsible for the violent decline, listing the lack of leverage as one of the main reasons. He explained that leverage has yet to return to the crypto industry, as it “sort of deleveraged in October” and continues to see the ripple effect. He also considers that the precious metals’ massive rally in January has added pressure to the crypto market. “Now, when we have gold and silver doing so well, especially at the start of the year,” he asserted, “that created FOMO and was like a vortex sucking all risk appetite towards the precious metals trade.” BitMine’s chair highlighted recent geopolitical tensions and regulatory uncertainty in the US as factors for the weakening prices. “I think the broader economy’s actually in good shape. So, to me, the turmoil here is (…) there’s a lot of uncertainty because of Washington picking winners and losers. And some of this could be the new Fed pick.” Meanwhile, he stated that crypto fundamentals remain strong despite the recent price action. He expects that as long as fundamentals are good, “all the pieces are in place for crypto to be bottoming right now,” arguing that prices have tapped key support levels and “enough time has passed.” BitMine Bets on Ethereum Fundamentals In BitMine’s latest update, Lee also noted Ethereum’s on-chain activity and fundamentals, affirming that they have grown over the past few months even as the ETH price declined to multi-month lows. “During the crypto winter of 2021-2022 or 2018-2019, Ethereum transaction activity and active wallets declined, which is counter to what we have seen in the past 12 months,” he detailed. As a result, BitMine, the second-largest crypto treasury company in the world, has continued to bet on Ethereum during the recent crypto market price correction. The Monday statement announced that the firm had acquired 41,788 ETH in the past week, worth $110 million at current prices. Moreover, the latest purchase has raised BitMine’s holdings to 4,285,125 ETH, 3.55% of Ethereum’s total supply. Related Reading: Crypto Hacks Explode: $370 Million Stolen In January Alone: Researchers Recent online reports pointed out that the crypto treasury company’s unrealized losses rose to $6.6 billion amid this performance, putting the company “on track to become the 5th-largest documented principal trading loss in history if sold.” Nonetheless, “BitMine has been steadily buying Ethereum, as we view this pullback as attractive, given the strengthening fundamentals. In our view, the price of ETH is not reflective of the high utility of ETH and its role as the future of finance,” Lee concluded. Featured Image from Unsplash.com, Chart from TradingView.com
