Bitcoin Hits $112,000— But Tom Lee Says $200,000 Might Still Come This Year
Bitcoin is currently trading at approximately $112,600, with Tom Lee from Fundstrat Global Advisors predicting it could reach $200,000 by year-end. He attributes this potential surge to shifts in monetary policy and historical trends in the fourth quarter. Lee notes that the Federal Reserve's pause on rate changes has created a unique market environment, which could lead to significant gains in cryptocurrencies and small-cap stocks. Despite current market highs, investor sentiment remains bearish, suggesting room for unexpected growth in the coming months.
Bitcoin BTC/USD could nearly double from current levels to $200,000 before year-end, according to Tom Lee, head of research at Fundstrat Global Advisors and Chief Investment Officer of Fundstrat Capital.
What Happened: Speaking on CNBC, Lee emphasized the strong link between monetary policy shifts and cryptocurrency performance.
At the time of publishing, Bitcoin was trading near $112,600 levels.
"Bitcoin and cryptocurrencies like Ethereum ETH/USD are super sensitive to monetary policy. So I think that September 17th is an important catalyst. Crypto typically does really well in the fourth quarter. So I think Bitcoin can easily get to 200,000 before year end,” he said.
Lee connected his bullish forecast to the Federal Reserve's next rate decision.
He noted that Bitcoin has stalled this year because the Fed has been on pause for nine months, calling this pause historically unusual.
"That pause all year… if you look at an easing cycle, that's only happened two other times in 1998 and 2024, where the Fed began to resume cuts in the fourth quarter in September. Equities do really well. As you know, crypto is beta to equity,” he added.
Also Read: Bitcoin, Ethereum ETFs Rebound With $2.48 Billion Net Inflows Week
Why It Matters: In Lee's view, the macro backdrop is aligning in favor of risk assets.
He pointed to the bond market's reaction to recent jobs data, which showed weaker labor conditions and triggered expectations for nearly three rate cuts by year-end.
Lee said the Federal Reserve will likely need to respond, which he believes would support business confidence, ease mortgage rates, and revive housing demand.
He also underscored that crypto's fourth-quarter seasonality has historically been strong. Beyond Bitcoin, Lee sees Ethereum and small-cap stocks as beneficiaries of the same trend.
"Small caps should also rally like IWM, but that also is really bullish for Ethereum, which is highly linked to small caps,” he said.
Despite equities sitting near record highs, Lee argued that investor sentiment remains unusually bearish.
He said the American Association of Individual Investors' (AAII) survey of bulls minus bears had been negative for five straight weeks, a backdrop that he believes creates room for surprise gains.
"At all time highs, investors are bearish and we find that skepticism among our institutional clients. I think most are kind of bracing for a defensive view between September and year end. That's why I think that the stock market was surprised to the upside,” he further said.
Lee's call for a sharp rally in Bitcoin to $200,000 rests on the combination of Fed easing, historical performance during past easing cycles, and persistent investor caution despite rising markets.
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