Tom Lee says Bitcoin decoupling from chip stocks is crypto's 1934 moment

Fundstrat's Tom Lee says the recent strength in Bitcoin and Ethereum marks a structural break from the AI trade, comparing the moment to the creation of the US securities regulator in 1934.

Bitcoin rose 3.2% to $87,432 as of 14:30 UTC on July 28, while Ethereum gained 4.1% to $3,847.12, according to CoinGecko data. The moves came as the Philadelphia Semiconductor Index fell 1.8%, extending a two-week decline that has erased more than $200 billion in market value from the sector. Total crypto market cap stood at $3.12 trillion, with Bitcoin dominance at 52.3%.

"The decoupling we're seeing between Bitcoin, Ethereum and semiconductor stocks is crypto's 1934 moment," Tom Lee, head of research at Fundstrat Global Advisors, said in a CNBC interview on July 28. "Investors are starting to look beyond US regulatory uncertainty and focusing on global crypto adoption and tokenization."

Lee's reference to 1934 — the year the US Securities and Exchange Commission was created, ending the speculative era that preceded the Great Depression — frames the current rotation as a maturation event rather than a tactical shift. Trading volume for Bitcoin reached $28.4 billion over the past 24 hours, 34% above its seven-day average, while Ethereum volume hit $14.2 billion, CoinGecko data shows. Open interest across Bitcoin futures stood at $36.8 billion, with funding rates at +0.008%, near neutral levels that suggest the move is driven by spot buying rather than leveraged speculation.

Why This Matters for the Cycle

The decoupling thesis directly challenges the prevailing narrative that crypto prices remain tethered to tech equity beta. Since the start of 2025, the 90-day correlation between Bitcoin and the Nasdaq 100 had hovered near 0.65, according to data from IntoTheBlock. A sustained break below 0.50 would represent the first major divergence since the 2023 banking crisis, when Bitcoin rallied as regional bank stocks collapsed.

Lee's call also carries weight because of his track record on the AI trade. Earlier in July, he argued that widespread skepticism about AI spending durability was a bullish signal, comparing it to the late 1990s when investors repeatedly questioned Cisco Systems Inc. and other internet stocks before further gains. That view put him at odds with Steve Eisman, who warned on CNBC that markets could fall sharply if hyperscalers cut AI spending — a risk centered on Nvidia Corp.

Global Tokenization as the Next Catalyst

Lee pointed to tokenization of real-world assets as the structural driver behind the decoupling. The total value of tokenized assets across all blockchains reached $18.7 billion in July, up from $8.2 billion a year earlier, according to data from rwa.xyz. BlackRock Inc.'s BUIDL fund, the largest tokenized treasury product, has grown to $1.2 billion in assets since its March 2024 launch on Ethereum.

The shift comes as the Federal Reserve prepares for its two-day meeting beginning July 29. Traders currently price roughly a one-in-three chance of a rate hike, up from 16% a week earlier, according to CME FedWatch data. Lee expects the Fed to lean on quantitative tightening instead, a scenario he described as a way to pressure growth without deliberately slowing the economy — a backdrop that could further accelerate capital rotation out of rate-sensitive tech stocks and into non-correlated assets like Bitcoin.

This article is for informational purposes only and does not constitute investment advice.