What happened?
Tom Lee of BitMine warned Bitcoin can still suffer 40–50% drawdowns even with more ETFs and institutional interest. He said Bitcoin still tracks the stock market and tends to amplify equity moves. At the same time Lee and BitMine have been buying large amounts of Ether and remain bullish on crypto long-term.
Who does this affect?
Retail traders and short-term speculators are at risk of big losses from sudden, deep drops. Institutional investors, ETF managers, and funds that hold crypto could see flows, NAVs, and risk models tested. Corporate treasuries, miners, and major ETH holders like BitMine need to manage allocation and leverage because sharp drawdowns would hit balance sheets and sentiment.
Why does this matter?
A potential 40–50% Bitcoin drop would strain liquidity, raise margin-call risk, and push volatility back into crypto markets. Because Bitcoin still moves with equities, a big sell-off could cause wider, synchronized declines and reduce diversification benefits. Large institutional ETH purchases may support Ether, but big corrections would force rebalancing, tighten liquidity, and change investor appetite across the market.