Tom Lee: February Not 'Looking Great' For Bitcoin, But Stocks Look Ripe For Picking Amid Trump Tariff Sell-Off

As the markets grapple with the fallout from President Trump's tariff announcements, investors are left wondering what the near-term outlook holds for their portfolios. Tom Lee, managing partner and head of research at Fundstrat Global Advisors, has weighed in on the situation, offering a bearish take on Bitcoin for February while expressing optimism about the stock market's prospects amid the Trump tariff sell-off.

Lee's bearish outlook on Bitcoin for February is based on several factors, including the cryptocurrency's high market cap to GDP ratio, volatility, regulatory risks, and lack of institutional investment. He believes that these factors contribute to the unsustainability of the recent rally in Bitcoin and that a correction is likely in the near term.

However, Lee is more optimistic about the stock market's prospects in the near term. He predicts that the S&P 500 will rise to 7000 by the middle of 2025, with a potential pullback in the second half of the year. He attributes this optimism to several factors, including the Federal Reserve's dovish stance, the new administration's pro-business policies, and the potential for a "Trump put" due to the President's focus on stock market performance.

Lee sees opportunities for investors in both the stock market and Bitcoin. For the stock market, he recommends investing in cyclical and financial stocks, as well as small caps, which he believes will benefit from deregulation and economic cycles. He also suggests that investors should be prepared to buy stocks during any pullbacks in the market.

For Bitcoin, Lee recommends allocating at least 2% of an investor's portfolio to cryptocurrencies. He believes that the combination of Bitcoin's halving cycle, the potential for it to become a strategic reserve asset, and the growing demand for spot Bitcoin exchange-traded funds (ETFs) will drive its price higher in the coming years.

The tariffs announced by President Trump have had a significant impact on the stock market, with futures plunging on Monday. The Dow futures were down 1.4%, or over 600 points, while S&P 500 futures dropped 1.9%. The tech-heavy Nasdaq Composite futures were down 2.4%. This sharp selloff implies that the indexes will open substantially lower when trading kicks off on Monday.

The tariffs, which include 25% duties on Canada and Mexico and 10% duties on China, have been met with retaliatory measures from Mexico, Canada, and China. Mexico's President Claudia Sheinbaum announced that her country will impose retaliatory tariffs, while Canadian Prime Minister Justin Trudeau announced "far-reaching" retaliatory levies. China's commerce ministry said it will file a complaint with the World Trade Organization and "take corresponding countermeasures."

The tariffs have been a significant factor in the market's recent dynamics, with investors concerned about the potential impact on global trade and economic growth. The uncertainty surrounding the trade war and the potential for further retaliation from other countries has led to a selloff in the stock market.

In the near term, the tariffs are likely to continue to impact the stock market's performance. The retaliatory measures from other countries could further disrupt global trade and lead to a slowdown in economic growth. This, in turn, could lead to a decrease in corporate earnings, which would negatively impact stock prices.

Additionally, the tariffs could lead to higher prices for consumers, which could put upward pressure on inflation. This could keep the Federal Reserve from cutting interest rates, which it began doing in September to give the U.S. economy a boost. Higher interest rates can put pressure on all kinds of investments, but they're particularly burdensome on stocks seen as the most expensive.

Overall, the impact of Trump's tariffs on the stock market's performance in the near term is likely to be negative, with investors concerned about the potential impact on global trade, economic growth, and corporate earnings. The uncertainty surrounding the trade war and the potential for further retaliation from other countries is likely to continue to impact the market's dynamics in the near term.



In conclusion, Tom Lee's bearish outlook on Bitcoin for February is based on several factors, including the cryptocurrency's high market cap to GDP ratio, volatility, regulatory risks, and lack of institutional investment. However, he is more optimistic about the stock market's prospects in the near term, predicting that the S&P 500 will rise to 7000 by the middle of 2025. He sees opportunities for investors in both the stock market and Bitcoin, but his recommendations differ based on his outlook for each asset class. The impact of Trump's tariffs on the stock market's performance in the near term is likely to be negative, with investors concerned about the potential impact on global trade, economic growth, and corporate earnings. The uncertainty surrounding the trade war and the potential for further retaliation from other countries is likely to continue to impact the market's dynamics in the near term.