Bitcoin Could Still Drop 50% Despite Institutional Support, Warns BitMine’s Tom Lee

TLDR

• BitMine chair Tom Lee warns Bitcoin could still experience 50% price declines despite increased institutional investment and spot ETF launches
• Lee argues Bitcoin remains highly correlated with stock markets and amplifies their movements, potentially dropping 40% if the S&P falls 20%
• Bitcoin has broken from its typical four-year cycle, with Lee predicting a “longer cycle” is now developing
• Lee maintains his forecast for Bitcoin to reach $200,000 to $250,000 by year-end despite the volatility warning
• Lee views Ethereum as undervalued and expects BitMine to become the world’s largest Ethereum holding company

BitMine chair Tom Lee has cautioned that Bitcoin remains vulnerable to steep price crashes even as Wall Street embraces the cryptocurrency. Speaking in an interview with crypto entrepreneur Anthony Pompliano, Lee stated he expects Bitcoin to experience 50% drawdowns in the future.

The warning comes as many market participants have suggested that Bitcoin’s volatility would decrease following the launch of spot Bitcoin ETFs and growing institutional adoption. Lee disagrees with this assessment, pointing to the cryptocurrency’s continued correlation with traditional stock markets.

Bitcoin’s Cycle Breaking Down

Lee also discussed changes in Bitcoin’s market behavior. The cryptocurrency has moved away from its traditional four-year cycle, which would have predicted a peak in October 2025.

Instead, Lee believes a “longer cycle” is now forming. He maintains his prediction that Bitcoin will reach between $200,000 and $250,000 by the end of 2025.

A 50% correction from that projected price range would bring Bitcoin down to approximately $125,000. This level sits near Bitcoin’s current all-time high of around $110,000.

If Bitcoin has already peaked at its current price, a 50% decline would push it to roughly $54,990. Bitcoin last traded at that level in September 2024.

Lee is not alone in his bearish outlook. Veteran trader Peter Brandt recently compared Bitcoin’s current price chart to the soybean market pattern from the 1970s, which preceded a 50% crash.

Historical Precedent for Sharp Declines

Bitcoin has experienced similar steep declines in the past. In November 2021, the cryptocurrency reached a then-record high of $69,000.

Within just over three months, by late January 2022, Bitcoin had fallen roughly 50% to around $35,000. This demonstrates that such dramatic price swings can occur rapidly.

Lee remains optimistic about Ethereum despite his Bitcoin warning. He stated that BitMine will continue accumulating Ethereum and aims to become the world’s largest Ethereum holding company.

BitMine currently holds over 3.2 million Ethereum, representing about 2.7% of the total supply. The company plans to increase its holdings to 6 million Ethereum long-term. Lee argues Ethereum remains undervalued and could reach $21,000 if the Ethereum-Bitcoin ratio returns to its 2021 peak.

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