Tom Lee Reveals Three Possible Reasons Behind Crypto Market Crash

Prominent market analyst Tom Lee has offered three potential explanations for the recent crypto market crash that has erased billions in market capitalization. Bitcoin fell below $70,000 on Friday, Nov. 13, and continued declining to around $62,112 by Sunday, its lowest level since July.

Ethereum has experienced even steeper losses, dropping to approximately $1,711, also its lowest price since early July. Major cryptocurrencies like XRP and Solana (SOL) are also facing significant declines.

Margin Calls from AI Stocks

Lee points out that the recent crash in AI and semiconductor stocks, particularly Nvidia, may have triggered margin calls for retail investors in Asian markets. This scenario could have forced investors to sell other assets, including cryptocurrencies, to cover leveraged positions.

IPO Preparations and Hack Aftermath

Another potential reason is investors selling off equity and crypto holdings to free up funds ahead of Anthropic's upcoming IPO. Additionally, the aftermath of the $6.3 billion Binance hack in late October may be contributing, as some account holders cash out or convert recovered funds into stablecoins.

Market Impact

The sharp decline has resulted in approximately $2 billion in liquidated leveraged crypto positions in the last 24 hours, mostly affecting bullish traders. Meanwhile, U.S. spot Bitcoin ETFs have seen nearly $3 billion in net outflows from Oct. 30 to Nov. 13, indicating institutional investors are also selling off.