The recent bloodbath in the Satoshi Streets may feel like a full-blown bear phase, but according to Fundstrat Tom Lee, the current situation is far from a traditional “crypto winter.” Instead, he describes it as a short-term reset driven by external factors rather than structural weakness.
A Different Kind of Crypto Downturn
Lee points out something unusual. He points out that this is the first time a major crypto decline has occurred without a corresponding stock market crash. Historically, every major crypto winter has been tied to broader financial stress.
He points out that Ethereum has dropped around 65% since October, which is in line with previous sharp declines. But historically, every similar drop came alongside major equity market weakness.
- In 2016, crypto fell as stocks dropped 20% during an industrial slowdown
- In 2018–2019, Fed rate hikes triggered a market-wide correction
- In 2022, inflation and aggressive tightening crushed both stocks and crypto
- In 2025, tariff wars led to another 20% equity decline
This time? Stocks haven’t seen that kind of crash. That’s what makes this cycle different.
What’s Driving the Current Sell-Off?
“Instead, we’ve had a decline caused, I think, by two things. Maybe the cycle is one of the original things, but on October 10th was a crypto deleveraging event that triggered the first sell-off, and then this year, we had, another leg down in stocks because of the Iran war buildup.”
It started with a crypto deleveraging shock around October 10, which triggered the initial sell-off. That was followed by another wave of pressure linked to rising geopolitical tensions, particularly around Iran.
He also points to an interesting trend that Bitcoin is increasingly moving in sync with software and AI stocks. So when there’s weakness in tech, crypto feels it too, adding another layer of pressure.
Why This Is Just a “Mini Crypto Winter”
Looking at the current scenario, he adds that the market structure hasn’t broken.
There’s no major financial crisis, no deep recession, and no full-scale equity bear market. Instead, what we’re seeing is a mix of cycle-related weakness, leverage being flushed out, and macro “noise.”
That’s why he avoids calling this a full crypto winter.
Structure Still Intact
Despite the sharp corrections, Lee remains confident that crypto’s long-term structure is still strong.
In his view, once the impact of deleveraging fades and macro uncertainty settles, the market could stabilize, making this phase more of a temporary reset than a lasting downturn.
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