Key Takeaways
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Tom Lee attributed Bitcoin’s sharp decline to a “mechanical glitch”.
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He also publicly supported investor Mike Alfred’s accusation that higher entities are intentionally pushing Bitcoin lower.
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Some analysts are expecting Bitcoin to fall towards $80,562.
Bitmine chairman and well-known strategist Tom Lee claimed that a “mechanical glitch” played a central role in Bitcoin’s accelerating price decline, while also agreeing that deliberate market pressure may be pushing prices lower.
The comments come as Bitcoin fell near $83,000 on Friday, its lowest price since April, with analysts warning that a bear market has taken hold.
Speaking on CNBC’s Power Lunch on Thursday, Lee linked the decline to a technical failure in the exchange’s stablecoin pricing feed during the Oct. 10 crash, which triggered a wave of automatic liquidations.
Discussing the October 10 crash, Lee said:
“On a specific exchange, the price of stablecoin varied from other exchanges… it dropped to $0.65. But this only happened on this exchange due to liquidity.
Lee described the main issue as an automation defect linked to ADL (Automatic Deleveraging Liquidation), a mechanism he compared to a margin call.
“This error is actually essentially a bug, a code error … in retrospect, they would have pulled pricing from across the exchanges rather than relying on internal quotes,” he added.
When asked who was affected and where the bug originated from, Lee declined to identify any marketing firms.
“I’m aware of the names, but… I’m not someone who wants to name names,” he said.
Lee compared the damage to historic structural failures:
“In 1987, portfolio insurance was the quote problem and that triggered the cascade… in 2009, it was really that the collateral was not safe in real estate… in crypto, this code of ADL and the way they pull prices, will never happen again.”
He said that the crypto market has been “overwhelming since October 10,” and describes the current situation as an echo of that event.
While Lee refused to name any names when discussing the technical problem, many of the signs point to the damage that has occurred with Binance.
On October 10-11, screenshots showing USDe, a “synthetic dollar” created by Athena Labs, dropped to $0.65 on Binance spread on social media, creating fears of a catastrophic depeg.
