Tom Lee warns: Bitcoin could fall 50% despite institutional interest
BitMine's Tom Lee warns of the possibility of a 50% decline in Bitcoin, despite institutional interest and the emergence of ETFs. His arguments are based on correlation with the stock market and historical experience.
Bitcoin remains dependent on the stock market
BitMine's chairman claims that the leading cryptocurrency still follows the stock market and often amplifies its movements. “The stock market experiences more frequent 25% declines,” Lee explained in an interview with cryptocurrency entrepreneur Anthony Pompliano. He emphasized that the stock market has experienced an unusually high number of such corrections over the past six years.
The analyst cites a simple formula for the relationship: if the S&P 500 index falls by 20%, Bitcoin could lose up to 40% of its value. At the current price of $111,200, such a drop would mean a decline to around $66,700.
Disruption of the four-year cycle
Lee also noted a significant shift in Bitcoin's behavior—a break with the traditional four-year cycle. He said the peak was expected to occur in October, but it didn't. Instead, a “longer cycle” is emerging, which could alter conventional forecasts.
Despite the downside warning, the expert maintains an optimistic long-term outlook. In the Coin Stories podcast, he reiterated his forecast for Bitcoin to rise to $200,000-$250,000 by the end of the year. At these levels, a 50% correction would return the price to around $125,000—close to the current all-time high.
Historical analogies and precedents
Lee's position is supported by veteran trader Peter Brandt, who recently drew a parallel between Bitcoin's current chart and the behavior of the soybean market in the 1970s before its 50% crash.
Soybean price chart from 1977. Source: Peter Brandt
History confirms the reality of such scenarios. In November 2021, Bitcoin reached an all-time high of $69,000, then plummeted 50% in just over three months to $35,000 by the end of January 2022.
Not everyone shares the pessimistic view. Strategy Chairman Michael Saylor stated in June, “Winter is not coming back.” He believes institutional adoption and the emergence of spot Bitcoin ETFs have fundamentally changed the market dynamics.
Source: cryptonews.net
