What Thomas Lee Sees for Bitcoin and Crypto in 2026

Thomas Lee, the co-founder of Fundstrat Global Advisors, made a bold declaration this week: Bitcoin’s breakthrough is still ahead, not behind. During a recent media appearance, Lee doubled down on his constructive crypto stance, arguing that digital assets could reach uncharted territory as we progress through 2026—a year he characterizes as transformative but marked by significant near-term turbulence.

As of January 22, Bitcoin is trading around $90,040, having previously touched an all-time high of $126,080 in October 2025. Despite missing his August forecast that Bitcoin would surpass $200,000 by year-end, Lee remains unfazed by the volatility. “I don’t think Bitcoin has peaked yet,” he stated, emphasizing that January could prove pivotal for a fresh surge.

Bitcoin’s January Window and the Case Against Peak Prices

Thomas Lee’s core thesis challenges the market narrative that Bitcoin has exhausted its bullish potential after October’s record run. He points to January specifically as a potential inflection point, suggesting that institutional dynamics and technical positioning could catalyze another leg higher toward new all-time highs by month-end.

The timing matters. After a pullback in late 2025 across digital assets, institutional repositioning has created what Lee sees as a genuine opportunity rather than a warning sign. This reframing—treating market weakness as a setup for strength—underpins his broader 2026 outlook and explains why he remains willing to stake his firm’s capital on Ethereum even as near-term headwinds persist.

A Volatile First Half, Then the Massive Rally Begins

Thomas Lee frames 2026 as structurally divided: turbulent waters in the first six months, followed by a powerful second-half rally. The first-half turbulence stems from institutional rebalancing and what he calls a “strategic reset” in crypto markets—a necessary digestion phase after years of outsized gains across risk assets.

“2026 is going to be a year of two halves,” Lee explained. “The first half of 2026 may be tough as we deal with institutional rebalancing and a strategic reset in the crypto markets, but that volatility is exactly what sets the stage for the massive rally we expect in the back half.”

This narrative is crucial because it reframes 2026’s volatility not as a sign of structural weakness but as market cleansing. Institutions reshuffling their digital asset exposure isn’t a retreat—it’s repositioning for growth. The pullback itself becomes the setup for explosive gains once volatility subsides and institutional capital redeploys.

Ethereum’s Supercycle: From Undervaluation to Treasury Necessity

Thomas Lee’s most aggressive call centers on Ethereum. He believes the second-largest cryptocurrency is entering a multi-year expansion phase reminiscent of Bitcoin’s 2017-2021 trajectory. As of January 22, Ethereum trades near $3,020, still well below its 2025 peak of $4,950, making it, in Lee’s view, dramatically undervalued.

His conviction is so strong that Bitmine Immersion Technologies—his crypto mining and investment firm—has been steadily accumulating Ethereum. The firm now holds 4.14 million ETH, framing this as a balance-sheet imperative rather than a speculative bet.

“Our belief is that Ethereum is dramatically undervalued,” Lee said. “We believe ETH is entering a supercycle similar to Bitcoin from 2017 to 2021.” He pivoted the narrative from trader mentality to institutional strategy: “Acquiring an asset that can appreciate by 10 times or more is a strategic necessity for any modern treasury.”

This reframing—treating cryptocurrency holdings as a treasury function rather than a trading position—signals how institutional adoption may evolve throughout 2026.

Broader Market Implications: S&P 500 and the AI Growth Story

Thomas Lee’s crypto optimism doesn’t exist in isolation. He projects the S&P 500 reaching 7,700 by year-end 2026, driven by resilient corporate earnings and AI-powered productivity gains. This interconnected view suggests that crypto strength and broader market strength spring from the same wellspring: technological transformation and institutional adaptation.

“If you look at the fundamental strength of the U.S. economy and the AI-driven productivity gains, we are looking at a path to S&P 7,700 by year-end 2026,” Lee noted. “This is supported by an EPS story that is far more resilient than the bears are giving it credit for.”

For Thomas Lee, pullbacks across both traditional and digital assets represent opportunity, not capitulation. His framing—“There’s a lot to be optimistic about in 2026”—encapsulates a worldview where near-term volatility is a feature, not a bug, in a transformative year ahead.