With AI and robotics accelerating so fast, crypto is even more relevant today, said Fundstrat's Tom Lee.
• He echoed BlackRock's view that Bitcoin's long-term investment case remains intact even after a roughly 50% drawdown from its October 2025 high.
• Ethereum would be "the most important L1," Lee said, referring to layer-1 blockchains.
Fundstrat's Tom Lee said crypto was "more relevant today given the rapidly increasing capabilities of AI and robotics," backing up a new BlackRock (BLK) report that reaffirmed the asset manager's bullish long-term case for Bitcoin (BTC) despite a roughly 50% drawdown from its all-time high.
Lee, who heads research at Fundstrat Global Advisors along with serving as the Chairman at Bitmine Immersion Technologies (BMNR), said in a post on X on Tuesday that he agreed with BlackRock's view and anticipated "growing use cases" for crypto. He also said Ethereum (ETH) would be "the most important L1," referring to layer-1 blockchains, the base networks on which decentralized applications are built.
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Why Bitcoin Is Down: BlackRock's Case
In a report published on Monday, BlackRock explained that Bitcoin's roughly 50% pullback from its October 2025 all-time high was driven by crypto-native deleveraging and shifting investor flows rather than a breakdown in Bitcoin's long-term investment thesis.
Speculative positioning became extreme as Bitcoin rallied above $120,000 in October last year, the report said, with futures open interest hitting as high as $90 billion and concentrated heavily in leveraged perpetual futures on offshore exchanges. The report also explained that large-scale deleveraging in the precious metals and crypto markets was triggered by macro-driven risk-off catalysts, including headlines around China tariffs, which led to a liquidation cascade that drove prices below $60,000 by June this year.
Bitcoin was a "dual personality" during the drawdown, BlackRock said, trading alongside risk assets at times as markets deleverage while also acting as a potential hedge during geopolitical disruption, most notably in the wake of the US-Iran conflict. Such periods of higher correlation with stocks have been "episodic rather than structural," the firm said.
In BlackRock's revised 10-year analysis, a small 1-2% allocation of Bitcoin funded from equities would have improved risk-adjusted returns in a traditional 60/40 portfolio, while generally maintaining similar portfolio risk features.