Sean Farrell, Fundstrat’s director of cryptocurrency strategy, responded in a written statement to criticism that his market views within the firm did not align with Tom Lee’s.
Farrell argued that Fundstrat has multiple analysts working with different analysis frameworks and investment horizons, aiming to serve diverse client profiles.
Farrell stated that his own research focuses on portfolios with a high crypto asset weighting (approximately 20% and above) and adopts a more active management approach. He explained that Tom Lee’s work, on the other hand, caters to large-scale fund managers and investors who allocate only 1-5% of their portfolios to Bitcoin and Ethereum, aiming to generate returns from structural trends with high discipline and a long-term perspective. He added that his own goal is to achieve outperform-the-index performance in different market cycles for high crypto-weighted investors through active rebalancing.
Farrell noted that his more cautious stance for the first half of the year was not due to a “bear market expectation” but rather a risk management approach; he drew attention to risks such as a possible government shutdown, trade fluctuations, uncertainties in AI investments, and potential changes in the Fed chairmanship. In addition, he stated that the market was “almost perfectly” priced due to narrowing high-yield bond spreads and low cross-asset volatility, while fund flows were diverging.
Farrell stated that Bitcoin is currently in “uncharted territory in terms of valuation,” adding that in the long term, ETF demand could strengthen with the entry of large brokerage firms into the market, but in the short term, factors such as early investor selling, miner pressure, the possibility of MSCI removing MicroStrategy (MSTR) from its indices, and fund buybacks are creating pressure.
According to Farrell’s baseline scenario, a recovery could be seen at the beginning of the year, followed by another correction in the first half, creating more attractive positioning opportunities for the end of the year. Farrell stated that if his prediction does not materialize, he would prefer to wait for confirmation signals. Despite all this uncertainty, he predicted that Bitcoin and Ethereum could test new all-time highs before the end of the year, thus ending the traditional four-year cycle with a shorter and more limited bear market.
*This is not investment advice.
