In a recent CNBC interview, Tom Lee of Fundstrat predicted that Bitcoin (BTC 2.71%) could hit a price of $200,000 by the end of 2025. And he said it could do so "easily." That's music to the ears of crypto investors everywhere.
But is this a realistic scenario? After all, Bitcoin currently trades for $115,000. So it would need to nearly double in price within a very short period of time. Bitcoin is known for its explosive year-end rallies, but is this simply asking too much?
Bitcoin's path to $200,000
At the beginning of the year, it was popular to talk about Bitcoin hitting the $200,000 mark. To a large extent, that was based on all the pro-crypto euphoria surrounding the new presidential administration. Bitcoin was coming off a record-setting run to $100,000 in 2024, and seemed primed for another big rally in 2025.
But thus far, things have not turned out as planned. Yes, Bitcoin hit a new all-time high of $124,457 over the summer, but is still only up 20% for the year. That's impressive performance for just about any other asset on the planet, but not for Bitcoin. In both 2023 and 2024, for example, Bitcoin turned in triple-digit returns.
Image source: Getty Images.
So, if anything, Bitcoin is actually underperforming in 2025. That's what makes a doubling in price by the end of the year so dicey. Bitcoin is still down 3% over the past 30 days, and seems to have stalled out under the $120,000 price level.
The key catalyst for Bitcoin
With that in mind, Tom Lee of Fundstrat thinks that there is one catalyst that could turn things around for Bitcoin: a series of rate cuts from the Federal Reserve. Historically, interest rate cuts have been good for crypto, especially for Bitcoin. That's because lower rates make speculative, non-interest-bearing assets more attractive in the eyes of investors. As a result, money has a tendency to move into Bitcoin.
One rate cut, of course, might not be enough to move the price of Bitcoin. But if investors are anticipating a series of rate cuts, that might do the trick. That's especially the case since interest rates have been on pause throughout 2025. Theoretically, there's a torrent of new demand waiting to move into Bitcoin, as soon as the Fed starts cutting. According to Tom Lee, this is exactly what's needed to send Bitcoin to the stratosphere.
Potential spoilers
There are, however, potential spoilers here. One is the current macroeconomic situation. Uncertainty around tariffs is now leading to uncertainty about what's actually happening with the broader U.S. economy. Jobs numbers are weakening at the same time as inflation appears to be increasing.
That puts the Fed in a bind, since it has a dual mandate to keep the economy humming while simultaneously keeping inflation in check. So investors might be overestimating the chances of further rate cuts down the road. If Fed rate cuts to stimulate the economy are too deep, then inflation might become uncontrollable.
Moreover, there are growing signs that the Bitcoin treasury company business model might be coming under pressure. Bitcoin treasury companies such as Strategy (formerly known as MicroStrategy) are now trading at their lowest levels in months, and no longer command the premium they once did.
That's important, because these Bitcoin treasury companies helped to propel Bitcoin to its new all-time high over the summer. Now, there's growing concern that the popularity of these Bitcoin treasury companies is nothing more than a speculative bubble. Weak, underperforming companies are transforming into companies that do nothing but buy Bitcoin. With that new crypto mandate, they are able to attract money from outside investors who are looking to get exposure to Bitcoin.
But here's the thing: These companies can only continue to attract money if the price of Bitcoin continues to go up. As a result, these Bitcoin treasury companies must continually talk up the price of Bitcoin. If the price of Bitcoin falls, the entire Bitcoin treasury company model comes under tremendous pressure.
Where does Bitcoin end the year?
Certainly, it's shaping up to be an interesting final quarter of the year. Right now, on online prediction markets, traders think there's a 30% chance of Bitcoin hitting $150,000 this year, and only a 5% chance of hitting $200,000 this year.
That sounds about right. Bitcoin historically performs well over the final months of the year, so it will likely make a run at another all-time high sometime during the winter. But I'd be very surprised indeed if Bitcoin hits $200,000 by the end of the year.
