Tom Lee: $250K Bitcoin Target Stands, But 2026 May Be Jagged

Tom Lee’s bullish $250,000 forecast for Bitcoin comes with a significant caveat: he expects 2026 to be a “jagged” year for crypto adoption and a turbulent one for the wider market. While he believes the year will ultimately “look like a continuation of the bull market that started in 2022,” he argues markets must first navigate several transitional pressures that could deliver a drawdown large enough to “feel like a bear market.” For the S&P 500 (SPX), Lee suggested this correction “could be 10%,” but also “could be 15% or 20%,” potentially creating a “round trip from the start of the year” before a strong finish.

Lee pointed to three primary friction points. First is a “new Fed” dynamic, where markets historically “test” a new chair, with the sequencing of identification, confirmation, and reaction potentially catalyzing a correction. Second, he warned the White House could become “more deliberate in picking winners and losers,” expanding the sectors and industries “in the bullseye.” Third is uncertainty around AI positioning, as the market calibrates “how much is priced into AI,” from energy needs to data-center capacity. Despite these headwinds, Lee noted his institutional clients are not yet aggressively positioned, and while margin debt is at an all-time high, its 39% year-over-year growth is below the 60% pace he associates with local market peaks.

A central theme in Lee’s analysis is a specific event that reshaped crypto market structure. He identified October 10, 2023, as the date of “the single largest deleveraging event in the history of crypto,” an event he described as “bigger than what happened in November 2022 around FTX.” Following this, Bitcoin (BTC) fell more than 35% and Ethereum (ETH) almost 50%, severing a prior correlation where crypto had tracked gold. “Crypto has periodic deleveraging events,” Lee said, explaining that they “really impair the market makers and the market makers are essentially the central bank of crypto.” He estimated that roughly half of these crucial liquidity providers were wiped out on that day.

This fragility, however, does not negate Lee’s long-term thesis for Bitcoin. “Bitcoin is digital gold,” he affirmed, but clarified that the current investor base for this thesis “is not the same universe that owns gold.” He argued that crypto still has a “future adoption curve that’s higher than gold because more people own gold than own crypto,” but the path will be “very jagged.” Lee sees 2026 as a critical test: “if Bitcoin makes a new all-time high, we know that that deleveraging event is behind us.”

Within this framework of near-term turbulence and long-term adoption, Lee reiterated his high-conviction $250,000 Bitcoin target. “We think Bitcoin will make a new high this year,” he stated, tying the thesis to the rising “usefulness” of crypto, increasing recognition by banks of blockchain settlement and finality, and the emergence of natively crypto-scaled financial models.

As a prime proof point for this new model, Lee cited Tether (USDT). He claimed the stablecoin issuer is expected to generate nearly $20 billion in earnings in 2026 with roughly 300 employees. This profit profile, he argued, illustrates why blockchain-based finance can look structurally and operationally different from legacy banking, offering a glimpse into a more efficient financial future.

Lee closed with strategic advice that deliberately counters short-term trading instincts. “Trying to time the market makes you an enemy of your future performance,” he cautioned. His message to investors was clear: “As much as I’m warning about 2026 and the possibility of a lot of turbulence, they should view the pullback as a chance to buy, not the pullback as a chance to sell.” At the time of the interview, Bitcoin traded at $89,287, with Lee’s forecast implying nearly a 180% upside from that level, contingent on navigating the jagged path ahead.