Crypto Market Turmoil Tied to Market Maker Stress, Says Tom Lee. Source: Image by Mohamed Hassan from Pixabay

BitMine Chairman Tom Lee believes the latest crypto crash is not a sign of fading adoption or long-term weakness but rather the result of a serious liquidity imbalance involving one or more major market makers. According to Lee, a hole in their balance sheets may be triggering forced liquidations and aggressive sell-offs, creating an environment where fear spreads quickly and opportunistic traders push prices even lower to amplify market stress.

In a recent interview, Lee warned that Bitcoin could face a temporary drop of up to 50%, reflecting the fragility of current market structure rather than a collapse in fundamentals. Bitcoin’s struggle to reclaim key support levels and Ethereum’s related selling pressure highlight how structural shocks can ripple through the crypto ecosystem. Despite the volatility, Lee emphasized that the downturn is short-lived and driven by mechanical market forces, not declining demand or weakening long-term trends.

Lee reinforced his bullish long-term stance on Ethereum, noting that Wall Street’s momentum toward an ETH supercycle remains strong. BitMine’s ongoing Ethereum accumulation reflects his confidence in the project’s future. He stressed that traditional finance continues to integrate blockchain technology at a rapid pace, a trend he sees as one of the strongest drivers of the industry’s long-term growth.

However, Lee urged investors to avoid leverage during this period of heightened volatility, warning that liquidations are hitting leveraged traders the hardest. He suggested that recovery could begin within six to eight weeks, likely after Thanksgiving, once the structural pressures ease.

Meanwhile, Treasury Secretary Scott Bessent revealed that the U.S. and China are working toward finalizing a rare earths agreement by Thanksgiving. The deal aims to prevent tariffs and avoid export restrictions on critical minerals essential for defense, energy, and high-tech manufacturing. Bessent expressed confidence that China will honor its commitments, citing productive talks between President Trump and President Xi and a mutual desire for stability.