Bitcoin has drawn massive attention from Wall Street and major investors in recent years. Yet despite this confidence, BitMine chair Tom Lee has issued a cautionary message. He says that the cryptocurrency could still fall as much as 50%, even despite its strong institutional backing.
Institutional Support Doesn’t Eliminate Risk
Lee shared his thoughts during an interview with crypto entrepreneur Anthony Pompliano.
Many investors believe that the rise of spot Bitcoin ETFs and Wall Street involvement will bring lasting stability. According to Lee, that’s a dangerous assumption.
Lee says wall street’s support doesn’t remove the risk | source: X
He noted that even though major financial institutions and funds have entered the market, Bitcoin remains prone to large corrections.
“The stock market has frequent 25% drawdowns,” Lee explained. “If the S&P is down 20, Bitcoin could be down 40.”
This statement shows an interesting thought. Bitcoin often mirrors the stock market but reacts more sharply to its moves. While institutional involvement might increase credibility, it doesn’t change Bitcoin’s underlying behavior.
Historical Lessons on Market Cycles
Lee backed his caution with historical examples. Over the years, Bitcoin has gone through repeated boom-and-bust cycles.
When prices surge too quickly, the pullbacks tend to be equally sharp.
Bitcoin’s history supports this. In November 2021, it reached a record high of about $69,000. By late January 2022, it had lost half its value and dropped to around $35,000.
The same pattern has appeared several times throughout its existence and shows that volatility is not just a phase but part of Bitcoin’s nature.
Lee compared this pattern to traditional markets as well. Even strong assets like stocks can lose large portions of their value during corrections. He said, “In the past, even top-performing assets have fallen 50% during downturns.”
A Longer Bitcoin Cycle Is Emerging
Beyond short-term volatility, Lee noted a shift in how Bitcoin behaves. Traditionally, the cryptocurrency has followed a four-year pattern linked to its “halving” events. These cycles often led to a price peak about 18 months after each halving.
This time, things look different. Lee believes Bitcoin may have entered a “longer cycle.” According to him, this could change how investors time their strategies.
He expects Bitcoin to reach between $200,000 and $250,000 by the end of the year, even as he warns of large pullbacks. A 50% correction from that range would bring prices back to around $125,000, which is close to Bitcoin’s current all-time high.
If Bitcoin has already peaked at about $110,000, a 50% decline would push it near $55,000.
Other Analysts Echo the Bitcoin Warning
Lee is not the only market veteran sounding the alarm. Experienced trader Peter Brandt recently compared Bitcoin’s chart and the soybean market from the 1970s, which collapsed by 50% after forming a similar pattern.
Such historical parallels indicate how familiar cycles can repeat, even in newer markets like crypto. Brandt’s analysis aligns with Lee’s belief that Bitcoin could mirror the traditional market before stabilizing again.
