Fundstrat’s Tom Lee reiterated his $250,000 Bitcoin target while warning that 2026 could be a “difficult” year for crypto adoption and widespread risk-asset volatility, positioning any major pullback as a buying window rather than a sign of risk-off.
Speaking on The Master Investor Podcast with Wilfred Frost in an interview released on January 20, Lee said he expects 2026 to ultimately “look like a continuation of the bull market that started in 2022,” but that bearish markets should begin digesting a few changes that could bring a decline big enough to “feel like a bear market.”
$250,000 Bitcoin Call Comes With 2026 Warning
Lee pointed out that in what he described as the “new Fed” volatility, the markets are often “testing” the new chair and that the sequence of identification, confirmation, and reaction may trigger a correction. He also warned that the White House may be “very objective in picking winners and losers,” expanding the set of sectors, industries, and even “bullseye” countries, which he said is already evident in gold’s strength.
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The third point of contention, in his telling, is the position of AI: the market is still measuring “how much AI is worth,” from power requirements to data center capacity, and that uncertainty may linger until other issues take hold.
Pressed by the magnitude, Lee said that in relation to the S&P 500, the drawdown “could be 10%,” but also “could be 15% or 20%,” which would likely produce “a round trip from the beginning of the year,” before finishing 2026 strong. He added that his institutional clients did not appear to be in an aggressive mood at the moment, and he noted that the loan amount was very high, he said, but it was up 39% year-over-year—less than the 60% pace he attributed to the peaks of local markets.
For crypto, Lee leans on a market structure explanation for why gold has been so successful: he said crypto tracked gold until October 10, when the market suffered what he called “the single biggest event in crypto history,” “bigger than what happened in November 2022 with FTX.”
After that, he said, Bitcoin dropped more than 35% and Ethereum almost 50%, breaking the connection. “Crypto has periodic deleveraging events,” Lee said. “It’s really disturbing the market makers and the market makers are actually the main bank of crypto. Most of the market makers I would say that maybe half of them were finished on October 10.”
That weakness, he said, doesn’t negate “digital gold” so much as it limits who owns it today. “Bitcoin is digital gold,” Lee said, but added that the set of investors who buy into that thesis “are not the same universe that owns gold.”
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Over time, Lee expects the ownership base to expand, though not quite. “Crypto still has, I think, a higher future adoption curve than gold because more people have gold than their crypto,” he said. “But the way to get that level of adoption up is going to be very difficult. And I think 2026 will be the most important test because if Bitcoin makes Bitcoin even higher, we know that scandal event is behind us.”
Within that framework, Lee repeated his bullish call: “We think that Bitcoin will make a new high this year,” he said, confirming the goal of $250,000. He tied the thesis to the rise of the “performance” of crypto, the banks that are aware of blockchain payments and the end, and the emergence of crypto-scaled financial models natively.
Lee cited Tether as a proof point, saying it is expected to generate nearly $20 billion in revenue by 2026 with nearly 300 employees, and said the profit profile shows why blockchain-based finance may look structurally different from legacy banks.
Lee closed with advice that cuts across the board against short-horizon reflexes. “Trying to time the market is the enemy of your future performance,” he said. “As I warn about 2026 and the presence of more chaos, they should look at the pullback as a buying opportunity, not the pullback as a selling opportunity.”
At press time, Bitcoin traded at $89,287.
The featured image was created with DALL.E, a chart from TradingView.com
