October 27, 2025 | New York —
After the largest crypto deleveraging event in five years, Tom Lee, chairman of Bitmine Immersion Technologies and co-founder of Fundstrat, believes the market has finally found its footing — and could be on the verge of a major recovery rally heading into year-end.
💥 The Biggest Liquidation in Years
The October 10 selloff, sparked by rising U.S.-China trade tensions, wiped out billions of dollars in leveraged crypto positions across major exchanges.
Lee described it as “the biggest liquidation event in five years,” with ripple effects still felt two weeks later.
Despite the shakeout, he noted that both Bitcoin and Ethereum have shown remarkable resilience, suggesting the correction may have cleared out excess leverage that had been weighing on the market.
“There are still ripple effects from that liquidation,” Lee said, “but Bitcoin and Ethereum are already stabilizing, with technicals now flipping positive.”
📊 Technicals Turning Bullish
According to Lee, open interest in crypto futures has dropped to record-low levels, often a precursor to renewed bullish momentum.
He emphasized that technicals for both BTC and ETH have turned favorable, marking a potential shift from the post-liquidation slump to a recovery phase.
As of Sunday, Bitcoin traded near $113,500, while Ethereum also rebounded alongside improving on-chain activity, especially from stablecoin transactions on both Layer 1 and Layer 2 networks.
“This is a healthy reset,” Lee explained. “The market needed to flush out leverage. Now, the foundations look much stronger.”
🏦 Wall Street’s Crypto Shift
Lee’s comments coincide with JPMorgan Chase’s latest crypto initiative — a landmark move allowing institutional clients to use Bitcoin and Ether as loan collateral by the end of 2025.
The plan, which relies on third-party custodians, signals a major regulatory and institutional turning point for the banking giant once known for its skepticism toward digital assets.
Even CEO Jamie Dimon, who once dismissed Bitcoin as a “pet rock,” is now presiding over a system where that same “rock” can secure multimillion-dollar loans.
“It really helps to see JPMorgan embrace crypto-backed collateral,” Lee noted. “That’s a powerful signal that institutional adoption is deepening.”
💡 Early Signal for Broader Markets
Lee argues that crypto markets often lead equities in signaling broader liquidity cycles.
He sees Bitcoin’s stability and Ethereum’s rising network use as signs of improving risk sentiment that could spill into stocks and commodities.
“Crypto tends to move first,” he said. “When liquidity improves, Bitcoin reacts before other asset classes. If these signals hold, we could see a strong rally into December.”
📈 Outlook
Following one of the most dramatic shakeouts since the FTX collapse, the crypto sector appears to be stabilizing:
- Bitcoin is holding above $113K.
- Ethereum remains supported by high stablecoin volumes and Layer 2 adoption.
- Institutional interest continues to grow, led by JPMorgan’s collateral move.
Tom Lee remains cautiously optimistic, predicting a “pretty big movement by year-end” as the crypto market rebuilds confidence and liquidity returns.
Summary:
- Biggest crypto deleveraging since 2020 wiped billions.
- Tom Lee says Bitcoin & Ethereum “flipping positive.”
- JPMorgan to accept BTC/ETH as loan collateral.
- Lee expects a strong year-end rally if market stability continues.
