Fundstrat CIO Tom Lee Predicts ‘Monster’ Gains For Bitcoin And Ethereum On Fed Rate Cut

Fundstrat CIO Tom Lee says crypto market leaders Bitcoin (BTC) and Ethereum (ETH) are poised to print “monster” gains if the Federal Reserve announces a widely anticipated interest rate cut this week.

“I think they could make a monster move in the next three months,” Lee said, who is also chairman of ETH treasury firm Bitmine Immersion Technologies, in an interview with CNBC. 

Lee’s prediction is based on the belief that cryptos like BTC and ETH are sensitive to monetary policy and best placed to benefit from a rate cut, which typically leads to an increased appetite for risk-on assets such as cryptos.

Lee compared the current situation to September 1998 and 2024, when the Fed cut rates after an “extended pause.” 

“The Fed can actually reinject confidence by saying we’re back into an easing cycle,” he said, adding that a rate cut will be a “real improvement in liquidity.” 

Ethereum A ”Growth Protocol,” Lee Says

Lee said that while both Bitcoin and Ethereum are sensitive to liquidity in the market, the altcoin also stands to benefit from the recent move by AI developers and Wall Street to transition on-chain in what he called a “stablecoin-ChatGPT moment for crypto.” 

“So, Ethereum I think trades almost like 1971 Wall Street which was when the dollar went off of the gold standard” and there was “a lot of innovation,” Lee added. 

“Ethereum is essentially a growth protocol,” he said. “The convergence of both Wall Street moving onto the blockchain and AI and agentic-AI creating a token economy is creating a supercycle for Ethereum.” 

That’s also why BitMine has been so aggressive in accumulating Ethereum’s native ETH token, he added. The company is currently the largest corporate Ethereum holder globally, with around 2.15 million ETH valued at approximately $9.21 billion, data from StrategicETHReserve shows. 

Top ten ETH treasury firms (Source: StrategicETHReserve)

BitMine has employed the same debt-financing playbook used by Michael Saylor’s Strategy to purchase Bitcoin, and currently holds 1.78% of ETH’s total supply.

Analysts were recently flagging concerns around the company’s tumbling share price, but it’s surged 17% in the past week and is now down only 3% in the past month, according to Google Finance. 

Traders Anticipate Fed Interest Rate Cut As Trump Pushes For More

Lee’s predictions come as traders grow increasingly confident that the Fed will announce the first interest rate cut for the year this week.

The Fed begins a two-day policy meeting today, with the decision scheduled for Sept. 17. Markets expect a 25 basis point cut, which would lower interest rates to between 4% and 4.25%.

Traders on the decentralized predictions platform Polymarket place the odds of a 25 bps cut announcement this week at 92%. There are even some that see a 7% chance that a bigger, 50bps cut, will be announced. 

Interest rate cut odds (Source: Polymarket)

Those odds are echoed by the CME FedWatch tool, which shows that analysts see a 96.1% chance that rates will be cut in the next Fed meeting. These analysts also see a 3.9% chance that the Fed will slash rates by 50 bps.

That’s as US President Donald Trump continues to pressure Fed Chair Jerome Powell for large interest rate cuts. 

In August, Trump argued that interest rates should be cut by 3 percentage points. He added that interest rate reductions of this magnitude would save the US “one trillion dollars a year.”

The crypto market has traded flat over the past 24 hours ahead of the Fed decision, but maintains a capitalization of more than $4 trillion, according to data from CoinMarketCap.

BTC has managed a minor 24-hour gain while ETH has slid by a fraction of a percent. Both are in the green on the longer-term weekly time frame.