Lekker Capital’s Quinn Thompson advocates avoiding crypto for the summer and return in late Q3, citing record IPO supply, waning liquidity, and unresolved problems at Strategy (NASDAQ:MSTR) and Bitmine (NASDAQ:BMNR).



<h3>Three Headwinds Making Summer Crypto Dangerous Right Now</h3>



Thompson’s bearish case rests on three overlapping pressures hitting simultaneously.



SpaceX, Anthropic, and OpenAI are collectively bringing more than $3 trillion in new IPO supply to market, competing directly with existing tech names for capital. 



The Mag7 stocks that historically lead bull markets are lagging while the rest of the Nasdaq carries the index, a pattern Thompson describes as classic late-cycle behavior. 



Meanwhile, STRC is approaching one of its worst drawdowns since launch, and Thompson expects Strategy to raise its dividend by 50 basis points rather than the usual 25, adding to its cash obligations.



“My recommendation is to avoid the crypto market for the summer as it tends to struggle during the coming months even when there isn’t a barrage of severe headwinds in its way,” Thompson wrote. “Pick it back up in late Q3.”



<h3>The Hyperscaler Prisoner’s Dilemma That Threatens The Entire Tech Complex</h3>



Thompson identified what he calls a prisoner’s dilemma facing major cloud companies. If they keep spending on AI infrastructure, free cash flow and buybacks decline and their equities lag.



If they cut spending to restore balance sheets, semiconductor and AI supply chain names crash, taking the broader tech index down with them.



Either path leads to lower tech prices, which removes capital that would otherwise flow into Bitcoin (CRYPTO: BTC) and crypto. 



Thompson pointed to 140-plus activist groups across 24 states already blocking over $64 billion in data center development. 



He also noted Trump previously signaled tech companies should pay for their own power costs, a message he expects to return ahead of midterms.



<h3>Why Japan And The BOJ Deserve Attention This Month</h3>



Thompson flagged one additional risk. USDJPY is approaching its fourth highest weekly close in nearly 50 years, with a Bank of Japan meeting scheduled the day before the June FOMC. 



If Japan does not use that window to strengthen the yen, Thompson expects a breakout above 160, which Japanese policymakers will strongly want to avoid and which could trigger volatility across all risk assets at once.



Image: Shutterstock

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Lekker Capital’s Quinn Thompson advises avoiding crypto assets like Bitcoin, Ethereum, and XRP during the summer, recommending a return in late Q3. This bearish stance is driven by three main factors: record IPO supply from major tech firms competing for capital, waning liquidity, and unresolved financial issues at Strategy (MSTR) and Bitmine (BMNR). Additionally, a 'prisoner's dilemma' in AI infrastructure spending threatens tech equities, while potential Bank of Japan intervention regarding the USD/JPY exchange rate poses further macroeconomic risks to risk assets.

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'Avoid Crypto For The Summer': This Analyst Says Bitcoin, Ethereum, XRP Are No Good For Now