Fundstrat’s Tom Lee reiterated his Bitcoin target of $250,000, while warning that 2026 could be a “scary” year for cryptocurrency adoption and a turbulent year for broader risk assets, with any major pullback seen as a buying window rather than a signal to reduce risk.
Speaking on The Master Investor Podcast with Wilfred Frost in a interview Lee said he expects 2026 will ultimately “look like a continuation of the bull market that started in 2022,” but argued that markets must first process several transitions that could produce a drop big enough to “feel like a bear market.”
$250,000 Bitcoin Call Comes With a 2026 Warning
Lee pointed to what he described as a “new Fed” dynamic, arguing that markets tend to “test” a new chair and that the sequence of identification, confirmation and response can catalyze a correction. He also warned that the White House could become “more deliberate in picking winners and losers,” expanding the number of sectors, industries and even countries “in the bullseye,” which he said is already visible in the power of gold.
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A third sticking point, he says, is AI positioning: the market is still calibrating “how much is priced in AI,” from energy needs to data center capacity, and that uncertainty could continue until other stories take over.
Driven by size, Lee said regarding the S&P 500 that the decline “could be 10%,” but also “15% or 20%,” potentially creating a “return from the beginning of the year” before ending 2026 on a strong note. He added that his institutional clients did not yet appear aggressively positioned, citing leverage as a sign: Margin debt is at a record high, he said, but is up 39% year-on-year – below the 60% he associates with local market spikes.
For crypto, Lee drew on a market structure explanation for why gold outperformed: He said crypto trailed gold until Oct. 10, when the market suffered what he called “the largest deleveraging in crypto history,” “bigger than what happened around FTX in November 2022.”
Then, he said, Bitcoin fell more than 35% and Ethereum fell almost 50%, breaking the link. “Crypto has periodic deleveraging events,” Lee said. “It really hurts the market makers and the market makers are essentially the central bank of crypto. So many of the market makers I would say maybe half were wiped out by October 10.”
That vulnerability, he argued, does not so much negate the framework of ‘digital gold’, but it does limit who can deal with it in that way today. “Bitcoin is digital gold,” Lee said, but added that the group of investors buying this thesis “is not the same universe that owns gold.”
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Lee expects the ownership base to broaden over time, albeit not smoothly. “Crypto, I think, still has a future adoption curve that is higher than gold because more people own gold than crypto,” he said. “But the path to increasing that adoption rate is going to be very erratic. And I think 2026 will be a very important test because if Bitcoin hits a new all-time high, we know that that deleveraging is behind us.”
Within that framework, Lee reiterated his upside call with great conviction: “We believe Bitcoin will reach a new high this year,” he said, confirming a target of $250,000. He linked the statement to the increasing ‘usability’ of crypto, banks recognizing the settlement and finality of blockchain, and the rise of native crypto-scale financial models.
Lee cited Tether as evidence, claiming that it is expected to generate nearly $20 billion in revenue by 2026 with about 300 employees, and argued that its earnings profile illustrates why blockchain-based finance could look structurally different from traditional banking.
Lee concluded with advice that deliberately counters short-horizon reflexes. “If you try to time the market, you become an enemy of your future performance,” he said. “As much as I warn about 2026 and the possibility of a lot of turbulence, they should view the pullback as an opportunity to buy, not the pullback as an opportunity to sell.”
At the time of writing, Bitcoin was trading at $89,287.
Featured image created with DALL.E, chart from TradingView.com