Fundstrat's Head of Crypto Strategy Responds to Disagreement with Tom Lee: Still Bullish on BTC and ETH to New Highs

Sean Farrell, Head of Cryptocurrency Strategy at Fundstrat, a fund managed by Tom Lee, responded to questions about a potential divergence between his market views and those of Tom Lee in a post on the X platform. He stated that his more cautious view in the first half of the year reflected risk management, not a complete bearish outlook. Current market pricing is almost perfect, but risks remain, including government shutdowns, trade volatility, uncertainty surrounding AI capital expenditures, and a change in the Federal Reserve chairman. Meanwhile, high-yield bond spreads are tightening, and cross-asset volatility is low. Recent fund flows have also diverged. Bitcoin is currently in uncharted territory in terms of valuation. In the long term, ETF demand should improve as large brokerages join the fray, but in the near term, it faces pressure from early holders selling, miner pressure, the potential removal of MSTR from the MSCI index, and fund redemptions. Fundstrat employs multiple analysts, each with independent research frameworks and different investment timeframes, aiming to meet the diverse investment objectives of its clients. My research primarily focuses on portfolios with a high proportion of crypto assets and employs a relatively more aggressive market operation strategy. Tom Lee's research primarily serves large asset management firms and investors who allocate 1%–5% of their assets to BTC and ETH. Such strategies require a high degree of self-discipline and a long-term perspective to grasp structural (long-term) trends in order to achieve excess returns over time. My goal is to help clients and subscribers with a high proportion of crypto assets (approximately 20% or more) consistently outperform the market across different cycles through proactive rebalancing. My current baseline assessment is that there may be a rebound at the beginning of the year, followed by a possible pullback in the first half of the year, providing a more attractive opportunity for year-end positioning. If my assessment is incorrect, I prefer to wait for confirmation signals. For investors following this outlook, I still expect Bitcoin and Ethereum to challenge new all-time highs before the end of the year, thus ending the traditional four-year cycle with a shorter and smaller bear market.