Bitcoin’s Rebound Signals Stock Market Upside, Says Fundstrat’s Tom Lee

• Bitcoin’s rebound above April’s $93.8K pre-tariff level signals S&P 500 recovery toward 5,800, per Fundstrat’s Tom Lee.
• Corporate resilience during COVID, inflation, Fed hikes suggests earnings can beat tariff-impacted expectations, Lee notes.

Bitcoin’s recovery to levels last seen before U.S. tariff announcements in April could foreshadow gains for the S&P 500, according to Fundstrat’s Tom Lee. In a CNBC interview, Lee noted Bitcoin’s rise above $93,800—surpassing its April 2 price—as a potential indicator of broader market resilience. The S&P 500, currently at 5,673, might climb to 5,800 if historical patterns hold, he suggested.

Lee emphasized corporate adaptability amid economic shocks, citing COVID-19, inflation spikes, and rapid Federal Reserve rate hikes as past stressors. Companies navigated these challenges, he argued, and may again outperform expectations despite tariff-related uncertainties. “Earnings could surprise positively” Lee said, pointing to reduced pessimism around firms like Tesla and the “Magnificent Seven” tech stocks.

Lee highlighted diverging approaches between the Fed and European Central Bank (ECB). The ECB recently cut rates despite tariff-induced inflation risks, partly because its Harmonised Index of Consumer Prices (HICP) excludes housing costs.

If the Fed adopted similar metrics, Lee contended, U.S. inflation would appear lower, justifying rate reductions. With the Fed’s benchmark rate 2.25 percentage points above the ECB’s, he argued current conditions warrant easing to boost liquidity.

“The Fed has been on hold, and they’re saying they’re waiting for tariffs. But what’s interesting is the ECB (European Central Bank) has been cutting rates even though there’s tariffs inflation hitting Europe, or soon to hit Europe. The reason is European Central Bank inflation measure, the HICP (Harmonised Index of Consumer Prices), excludes shelter.

Bitcoin’s rebound aligns with Lee’s thesis that risk assets are undervalued. At press time, Bitcoin traded at $93,828, down 1.8% in 24 hours but 12% above April lows. Lee views this recovery as a signal for equities, noting Bitcoin often leads market sentiment shifts.

While tariff impacts remain uncertain, Lee’s analysis hinges on two factors: corporate earnings resilience and central bank policy adjustments. For investors, the interplay between Bitcoin’s momentum and Fed decisions could dictate near-term market trajectories. As Bitcoin tests key levels, its correlation with traditional assets may offer clues for portfolio strategies in a shifting macro environment.

Bitcoin (BTC) is trading at approximately $94,372, reflecting a modest increase of 0.51% over the previous day.

Recently, BTC experienced a brief dip to around $93,500, which analysts view as a minor correction within a broader bullish trend.  Technical indicators, such as the LMACD, suggest that Bitcoin maintains upward momentum, with key resistance levels at $100,000 and $107,000, and support levels at $92,000 and $85,000.

Institutional interest remains strong. Notably, Strategy acquired an additional 1,895 BTC for $180 million, bringing its total holdings to 555,450 BTC.  Additionally, Semler Scientific increased its Bitcoin holdings by purchasing $16.2 million worth of BTC.  These significant acquisitions underscore the confidence of institutional investors in Bitcoin’s long-term value.

Looking ahead, forecasts for Bitcoin’s price in May 2025 vary. ETHNews analysts predict that BTC could reach between $98,200 and $99,500 by the end of the month, assuming continued bullish momentum.  Others anticipate a potential rise to $100,700 or higher, depending on market dynamics and investor sentiment. 

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