Gold and silver have delivered some of the strongest returns across global markets this year, and the rally is increasingly influencing sentiment across crypto.
Key Takeaways
According to Tom Lee, gold and silver are rallying on momentum, FOMO, and macro uncertainty.
Lee says crypto is still weighed down by the October deleveraging that erased nearly $20B.
Some crypto investors are shifting into precious metals as returns diverge.
Lee notes that past gold rallies have often preceded strong Bitcoin moves.
In a recent CNBC interview, Tom Lee of Fundstrat said the surge in precious metals may look stretched, but a mix of momentum and macro forces is still driving prices higher.
Gold and silver momentum keeps building
Lee said gold and silver have been two of the most eye-catching trades not just in recent months, but over the past year. He cautioned that it is difficult to isolate a single cause behind the rally, whether currency debasement, investor demand, or prices rising simply because they keep rising. In China, some investment funds have seen silver ETFs trade at unusually large premiums, a sign that speculative demand and fear of missing out are becoming more intense.
According to Lee, price momentum itself has turned into a major force. Once metals started breaking higher, more investors piled in, reinforcing the trend and pushing valuations further.
Macro tailwinds favor metals and should support crypto
Geopolitical uncertainty, concerns about fiat currency debasement, and expectations of easier central bank policy have all acted as tailwinds for precious metals. Lee argued that these same forces should, in theory, be positive for crypto as well, since both are often viewed as alternatives to traditional currencies and financial systems.
Despite those shared tailwinds, crypto has failed to keep pace with gold and silver this year.
Deleveraging still weighing on crypto markets
Lee described crypto’s performance as a major disappointment, pointing to the market’s inability to fully recover from the October 10 deleveraging event. Nearly $20 billion was liquidated across crypto derivatives markets that day, marking a historic reset in positioning.
While digital assets showed some signs of recovery earlier this year, renewed geopolitical uncertainty triggered another wave of deleveraging. Lee highlighted that comments from President Donald Trump about Greenland added to market stress, cutting short the rebound attempt.
Investors rotate as metals steal the spotlight
With gold and silver posting outsized gains, Lee believes many crypto investors are shifting capital into precious metals. That rotation has amplified FOMO in metals markets while leaving crypto lagging behind in the short term.
However, Lee noted that this dynamic is not unprecedented. In past cycles, major rallies in gold have often acted as a precursor to strong moves in Bitcoin. He suggested the current environment reflects a broader surge in non-U.S. dollar assets, a trend that has already lifted metals and could eventually extend to crypto if historical patterns repeat.
