Bitcoin Will Rise No Matter Who Wins the Election: Tom Lee

The Fundstrat head of research told a Future Proof audience that investors should allocate at least 2% of their portfolios into bitcoin.

The biggest winner from the presidential election might be bitcoin, said Tom Lee, the popular market commentator and head of research at Fundstrat. 

Speaking to an audience primarily made up of financial advisors at the Future Proof conference in Huntington Beach, Calif., Lee explained that the cryptocurrency will be a winner regardless of the election outcome.

In Lee’s eyes, a Trump victory is bullish for bitcoin because he is “running on a pro-bitcoin platform and [has] even [touted] the idea that bitcoin becomes a Treasury asset.”

On the other hand, if Harris wins, bitcoin “won’t necessarily respond to [her] becoming president, but [it] will then focus on a dovish Fed…and that would be bullish for [the cryptocurrency].”

Lee's comments came as bitcoin has struggled to regain momentum after falling from its record high of $73,000, set in March. The largest cryptocurrency by market capitalization was recently trading near $61,000, its highest level since the end of August. Bitcoin remains a volatile asset tied frequently to macroeconomic events. 

The presidential election is currently considered a toss-up. 

Julie Hyman, the Yahoo Finance anchor who interviewed Lee, joked that people who like bitcoin say that it’s going to go up no matter what happens. Lee responded that since 2009, “bitcoin has gone up no matter what happens.”

“90% of the move in bitcoin is explained by the number of wallets and the activity per wallet. It's going to go up no matter who is president.”

Lee recommended that investors put 2% of their portfolios in bitcoin and “much higher if they’re younger.” 

Bullish on Stocks 

Bitcoin was a big focal point of the interview with Lee, but he was characteristically bullish on stocks as well.

He noted that he thinks the S&P 500 will be higher at the end of the year than it is now, but that the short-term could be bumpy.

“I think the second half of this year is going to be at least a 10% gain [for the S&P 500.] But “we don’t want people to be chasing the market until probably after [the election in] November. We are in a tough seasonal period.”

Though he was broadly bullish on the stock market, Lee seemed to favor some industries over others.

He was especially positive on stocks that would benefit the most from the Fed’s coming rate cuts, including small caps, financials and industrials. 

He mentioned that he thinks that regional banks, like those held by the SPDR S&P Regional Banking ETF (KRE), will outperform as the Fed lowers interest rates.

“I think groups that have been not participating—it’s been mostly a FAANG market for the last two years—flips to one that’s [led by] small caps, financials and industrials,” Lee concluded.