Despite renewed optimism around institutional adoption, Fundstrat’s Tom Lee has cautioned that Bitcoin remains vulnerable to sharp corrections, even as he maintains one of the most bullish forecasts on record for the cryptocurrency.
Lee’s Caution: Bitcoin Still Prone to Major Swings
In a new interview with Anthony Pompliano, Lee warned that Bitcoin could experience drawdowns of up to 50%, highlighting the asset’s continued tendency to amplify moves in the broader equity market. “Volatility in stocks hasn’t gone away,” Lee said, adding that as long as traditional markets remain unstable, Bitcoin’s price action will likely reflect that turbulence.
Still, Lee emphasized that such corrections are “a normal part of long-term bull markets.” He noted that major retracements often occur even in strong uptrends, framing any potential downturn as an opportunity for accumulation rather than panic.
Optimism for Year-End Rally
Despite short-term risks, Lee remains firmly bullish on crypto’s long-term trajectory. His firm continues to project a strong rally into the end of 2025, driven by accelerating institutional demand, tokenization growth, and improving macroeconomic conditions.
Lee has previously suggested that Bitcoin could reach $200,000–$250,000 by year-end, citing Ethereum’s expanding role in real-world asset (RWA) tokenization and growing investor participation through ETFs and treasury allocations.
Institutional Buying and Market Behavior
Earlier, BitMine Immersion Technologies, a company chaired by Lee, boosted its Ethereum holdings, capitalizing on mid-October’s market correction. The firm reportedly views the dip as a strategic buying opportunity ahead of expected year-end strength in both Bitcoin and Ethereum.
Uptober Disappointment and Altcoin Rotation
While October is traditionally seen as a bullish month for crypto, often dubbed “Uptober”, this year’s performance has been mixed. Bitcoin briefly slipped below $105,000 after a flash crash earlier in the month and has since struggled to regain strong momentum.
However, altcoins are showing renewed life, with Binance recording record-high altcoin futures trading volumes this week. Analysts attribute this rotation to traders seeking higher short-term returns amid Bitcoin’s consolidation.
Inflation Cooldown Sparks Relief Rally
Adding to the optimism, a softer U.S. inflation report helped restore market sentiment late in the week. Bitcoin rebounded to above $110,000, supported by improved risk appetite across global markets.
While Tom Lee’s warning of a potential 50% pullback underscores the volatility that still defines Bitcoin, his steadfast belief in a parabolic year-end rally reinforces one of the strongest institutional bull narratives heading into 2026, where both traditional finance and crypto may converge like never before.