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In a recent one appearance On CNBC’s “Squawk Box,” Tom Lee, Fundstrat Capital CIO and head of research, suggested that Bitcoin may still have a way to fall before making a substantial recovery. During the Jan. 13 segment, Lee spoke about the market’s broader concerns — such as inflation, bond yields and earnings — before drawing a parallel to the crypto space, specifically Bitcoin’s trajectory.
Can Bitcoin Reach $50,000?
“Bitcoin is down about 15% from its highs, which is a normal correction for a hypervolatile asset and follows global liquidity. We are still early in the halving cycle,” Lee noted, underscoring that price swings of this magnitude are common in the world of digital assets. He also elaborated on technical indicators that indicate future volatility, stating: “One level would be $70,000.”
A less likely scenario, but still possible, is a crash into the $50,000s. “It could be as low as $50,000. But again that is not a new level. That’s where it touches before it starts to collect,” Lee noted.
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Lee’s perspective paints a picture of a two-pronged price move for Bitcoin: a potential drop to the “$50,000s,” followed by a rise that could, in his words, “reach maybe $200,000 or $250,000.” He noted that despite the possibility of downside, long-term holders should not be deterred.
“Bitcoin is something you need to focus on for the long term. I don’t think anyone will lose money buying here for $90,000. If they try to time this they might get lucky and it goes to $70,000, but for me Bitcoin could be significantly higher this year, maybe $200,000 or $250,000. So I think $90,000 is still a good entry point,” said the Fundstrat CEO.
Lee’s comments came amid a broader discussion about market dynamics. The conversation started with the recent dip in stock prices and whether the Federal Reserve’s decision to suspend interest rate cuts could deter investors. Pointing to the upcoming inflation data as a crucial pivot point, Lee explained: “We have been correcting for almost a month now… I would like to see the CPI come in below 2.5% or so. I think that in addition to the profit figures, this would also give a boost of confidence to the markets.”
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He then highlighted what he sees as short-term noise around inflation statistics, which have been clouded by external events such as hurricanes and fires. “Last year’s hurricanes have clouded some of the quality of inflation, as hotel reservations, for example, would increase… It will also mess up used car prices,” Lee said, adding that once these anomalies disappear, the overall inflation could be lower.
When discussing Federal Reserve policy, Lee maintained a balanced stance, saying, “I think the best case is that the Fed cuts once, because the economy is strong enough and they are still dovish… They will find their way to find neutral. If they push the cuts to 2026 and 2027, that will be longer interest rates to support the markets.” He believes markets remain sensitive to policy uncertainty, especially under a new administration.
When asked whether stocks were overvalued, Lee drew a parallel with bond yields: “To me, the 10-year yield, even if it is 5%, is a multiple of 20 PE on a 10-year bond… The median price-to-earnings ratio is 17 times. I think equities offer you much more value than bonds at the moment.”
At the time of writing, BTC was trading at $95,618.
Featured image created with DALL.E, chart from TradingView.com
