- Fundstrat’s Tom Lee says markets may be entering a bottoming phase
- Crypto, tech stocks, and software companies are showing resilience
- Roughly 90% of the recent decline may already be completed
Tom Lee, co-founder of Fundstrat and head of Ethereum treasury firm BitMine, believes financial markets may be entering a bottoming phase. Speaking in a CNBC interview, Lee said that despite geopolitical tension and persistent macro uncertainty, market performance has been stronger than many expected.
According to Lee, markets have shown surprising resilience in the face of negative headlines. While he cautioned that it is still too early to declare a definitive bottom, the current pattern resembles the early stages of a bottom formation. The ability of markets to absorb bad news without collapsing further is often a key signal that selling pressure may be fading.
Resilience Amid Global Uncertainty
Lee acknowledged that geopolitical developments, including the possibility of escalating conflicts, remain a major concern for investors. Even so, he noted that markets have largely maintained stability despite the constant flow of alarming news.
Historically, persistent negative headlines can drive panic selling, but Lee suggested the current environment looks different. Instead of triggering further declines, the market appears capable of digesting the information while holding relatively steady. That behavior often appears during late-stage corrections.
Key Indicators Investors Are Watching
Lee pointed to several indicators that could signal whether the bottoming process is underway. One of the most important is the volatility index, or VIX, which measures expected market turbulence.
Last year, the VIX spiked to levels near 80 during extreme stress. Lee indicated that such panic levels may not appear this time around. The absence of extreme volatility spikes could suggest that investor positioning has already adjusted significantly.
Risk Assets Are Beginning to Lead Again
Another sign Lee highlighted is the behavior of risk-sensitive assets. In some cases, stocks have been rising while gold — typically viewed as a defensive asset — has softened. This rotation suggests the market may be “cleaning up” after months of uncertainty.
Lee believes March could become a period where markets begin forming a durable bottom. He estimated that roughly 90% of the decline across software companies, major technology stocks known as the “Magnificent Seven,” and cryptocurrencies may already be complete.
If that assessment holds true, assets such as tech equities and digital currencies could begin taking the lead again during the next phase of the market cycle.
