In recent years, few market strategists have made more timely calls than Fundstrat's Tom Lee. While most strategists were still bearish on the market after a difficult year in 2022, Lee turned positive and has ridden a bull market that has seemingly defied gravity and overcome every bearish indicator up until recent weeks. The broader benchmark S&P 500 Index has surpassed 6,100 on numerous occasions in recent months.
Bitcoin (BTC 0.83%), the world's largest cryptocurrency, also rallied significantly, especially after Donald Trump's presidential election victory in early November. Lately, though, as the market has sold off, Bitcoin and many other tokens in the sector have given up gains as well. This hasn't stopped Lee from taking a bullish view. He believes Bitcoin can soar at least 66% before the year ends.
Expect Bitcoin to go lower before it soars again
Bitcoin has sold off and been extremely volatile in recent weeks due to weakening consumer sentiment and Trump's trade war. But Lee and his independent financial research firm Fundstrat actually entered the year with a near-term bearish outlook on Bitcoin after such a strong run, as discussed on the RiskReversal podcast:
The work by our technical strategist Mark Newton [has shown that] Solana, Ethereum, and Bitcoin all have downsides. He has been bearish since mid-January so I think it's been correct and his downside target for Bitcoin is $62,000 by the end of March.
Overall, Lee likes Bitcoin because he thinks the token can hedge inflation due to its finite supply. However, Lee still views Bitcoin as a risk-on asset and therefore thinks it will struggle in the near term as the market gets hit by tariff news, and the rising odds of a full-blown trade war. As of this writing, the Trump administration has now implemented 20% tariffs against China and 25% tariffs against Mexico and Canada, and all three of those countries are planning or have implemented retaliatory tariffs.
Image source: Getty Images.
Ultimately, though, Lee doesn't expect any pullbacks to last long and believes Bitcoin is a good asset to hold for the long term. In a recent CNBC interview, Lee said he expects Bitcoin to do better than $150,000 this year, implying at least 66% upside from current levels (as of March 5) within the next 10 months.
Lee didn't elaborate too much on why he thinks Bitcoin will accelerate, and part of his work involves looking at technical patterns. But Lee did say that he thinks growing acceptance of Bitcoin, especially by larger institutions, will play a big factor. Lee specifically cited the possibility of the huge hedge fund and market maker Citadel eventually trading the token.
CRYPTO: BTC
Key Data Points
Recently, Bloomberg, citing anonymous sources, reported that Citadel is interested in becoming a market maker for crypto and would be interested in providing liquidity to some of the largest retail crypto exchanges, including Binance and Coinbase.
Continuing a bullish pattern
Interestingly, at the beginning of the year, Lee said he had a $250,000 price target for Bitcoin in 2025 based on market conditions at the time. He also cited the improving regulatory landscape under the Trump administration and the potential for a U.S. strategic crypto reserve, which Trump has directed a working group to examine.
Given near-term bearishness and events cited as potential catalysts, part of Lee's thesis appears to be playing out. That said, as good as Lee has been in recent years, I wouldn't read too much into price targets, especially for a volatile asset like Bitcoin. I do still like Bitcoin on a long-term basis, given the token's growing acceptance and potential to hedge inflation. But it's going to be volatile, so if you buy the token, make sure you are in for the long haul and not trying to trade it as a speculative asset.
