Tom Lee warns that Bitcoin may still fall by 50%, but the $250,000 bull run target remains unchanged.

Tom Lee, the chairman of BitMine, warned in an interview that despite the growing institutional adoption of Bitcoin, its volatility has not disappeared and the price could still experience a big dump of 50%, particularly during a fall in the stock market, which could amplify the decline. However, Lee remains a staunch supporter of the long-term bullish outlook, reiterating his prediction that Bitcoin could reach $200,000 to $250,000 by the end of this year. Additionally, BitMine has counter-trended by purchasing $1.5 billion in Ether this week, and Lee believes that Ether could soon experience a moment of “surpassing Bitcoin,” positioning it as the best candidate for long-term investment.

Bitcoin High Fluctuation Risk: Amplifier of Stock Market Declines

Against the backdrop of the launch of spot Bitcoin ETFs and increased institutional participation, the market generally anticipates that the price fluctuation of Bitcoin will ease. However, Tom Lee warns investors not to take extreme volatility lightly.

Lee emphasized that a 50% retracement will still be part of Bitcoin's price history. His core argument is based on the high correlation between Bitcoin and traditional markets:

1. Linkage effect: Bitcoin prices continue to fluctuate in sync with the stock market.
2. Fluctuation Amplification: He warned that Bitcoin often amplifies the fluctuations of the stock market by a factor of two. For example, if the S&P 500 index falls by 20%, the price of Bitcoin could experience a big dump of 40%.

This warning about correlation is supported by historical precedents: after reaching $69,000 in November 2021, Bitcoin fell nearly 50% to $35,000 in just three months. Veteran trader Peter Brandt has also issued a similar warning, comparing Bitcoin charts to the soybean market crash of the 1970s.

Long-term Beliefs and Bull Run Target: $250,000 Prediction

Despite the stern warnings about short-term fluctuations, Tom Lee remains extremely optimistic about Bitcoin's long-term prospects and sticks to his aggressive bull run targets.

Lee reiterated his prediction: Bitcoin could rise to levels between $200,000 to $250,000 by the end of this year. He believes that Bitcoin may be entering a “longer cycle” that will reshape investors' views on its rise and inevitable pullbacks.

If Bitcoin can reach this peak, a 50% pullback would bring its price back to around $125,000, approximately near the current all-time high. However, if the current price of Bitcoin, around $110,000, is the peak for this cycle, then a 50% fall would drop its price to around $55,000, a level not seen since September 2024.

Institutions Increase Positions in Ethereum Against the Trend: BitMine's Strategic Deployment

While warning about Bitcoin fluctuations, Tom Lee demonstrated a bullish attitude towards Ethereum through his company BitMine, taking large-scale investment actions.

BitMine Immersion Technologies made three significant purchases this week, accumulating a total of 379,271 Ether, with a total value of approximately 1.5 billion dollars. This move occurred after last weekend's big dump in the market, and Lee sees this pullback as a long-term buying opportunity.

Currently, this mining company holds over 3 million Ethereum, accounting for 2.5% of the total Ethereum supply, making it one of the largest corporate Ethereum holders. BitMine is reportedly aiming to control 5% of the circulating Ethereum.

Ethereum “Flips Bitcoin”: The Shift in Value Storage Role

Tom Lee's long-term optimism for Ethereum is reflected not only in large-scale purchases but also in his strategic positioning of Ethereum's future role in the crypto ecosystem.

Lee warned that the trading price of the digital asset treasury (DATs) is below its net asset value (NAV), suggesting a potential bubble burst. However, he still believes that this pullback is a long-term buying opportunity.

In a conversation with Cathie Wood, Lee compared the future of Ethereum to the historical shift on Wall Street from gold to stocks after 1971. He believes that Ethereum could ultimately “flip Bitcoin” ( flippen Bitcoin ), becoming the dominant store of value asset. This view is based on Ethereum's utility as a programmable currency and a global settlement layer.

Conclusion

Tom Lee's latest views provide Bitcoin investors with a dual perspective: on one hand, one must be wary of a pullback risk of up to 50% and the amplifying effect of its correlation with the stock market; on the other hand, the bullish target of $250,000 remains his firm belief. Meanwhile, BitMine has invested $1.5 billion to buy Ether counter-cyclically, boldly predicting that Ether is expected to “flip Bitcoin,” showcasing a long-term strategic deployment with greater growth potential for investors.

Disclaimer: This article is for news information only and does not constitute any investment advice. The cryptocurrency market is highly volatile, and investors should make cautious decisions.