Fundstrat Global Advisors Managing Partner Tom Lee told CNBC on Monday that Bitcoin still has the potential to reach $200,000 per coin before year-end.
The analyst, dubbed the "Wall Street Oracle" for his multiple accurate predictions of U.S. stock market movements, said the Federal Reserve is expected to cut interest rates at its next monetary policy meeting on September 17, a move that will drive Bitcoin prices higher.
"Cryptocurrencies like Bitcoin and Ethereum are extremely sensitive to monetary policy," Lee said. "I think September 17 will be an important catalyst." He added: "I think Bitcoin easily breaking through $200,000 before year-end is not difficult, although this would be a huge gain."
Bitcoin is currently trading slightly above $113,000, up less than 1% over the past 24 hours. The cryptocurrency hit an all-time high above $124,000 last month but has since pulled back due to investor concerns about inflation, the U.S. economy, and other macroeconomic uncertainties.
As a proponent of Bitcoin miner BitMine Immersions' Ethereum reserve strategy and chairman of the company, Lee has been generally accurate in judging Bitcoin's long-term upward trend but has repeatedly missed the mark on timing for price target achievement.
For example, in 2018 he predicted Bitcoin would reach $125,000 in 2022, but the cryptocurrency only peaked at $47,737 that year. After setting a historical record of $69,044 in 2021, it ultimately crashed to below $16,000.
Despite pressure from Trump demanding rate cuts, the Federal Reserve has not taken action this year. Analysts widely expect the Fed to cut rates next week. Standard Chartered Bank expects the Fed to cut rates by 50 basis points from the current 4.25%-4.5% range.
Historically, as liquidity enters the market, cryptocurrencies along with assets like stocks typically perform well in low interest rate environments.
Lee believes Bitcoin's stagnation this year is because the Federal Reserve has been on hold for nine months, and this pause is historically unusual.
"If you look back at easing cycles, this has only happened twice in history, in 1998 and 2024, when the Fed restarted rate cuts in September, in the fourth quarter. In these situations, stocks performed excellently. You have to know that cryptocurrency is a beta asset to stocks (meaning it has greater volatility than stocks and moves in the same direction as the stock market)," he added.
He also mentioned the bond market's reaction to recent employment data – which showed labor market weakness, triggering market expectations for "nearly three rate cuts by year-end."
Lee said the Federal Reserve will likely need to respond to this, and such a response is expected to boost corporate confidence, lower mortgage rates, and revitalize housing demand.
He also emphasized that from historical trends, cryptocurrencies have traditionally shown strong seasonal performance in the fourth quarter. Besides Bitcoin, Lee believes Ethereum and small-cap stocks will also benefit from this trend.
Although the stock market is already near historical highs, Lee believes investor sentiment remains unusually pessimistic.
He pointed out that survey data from the American Association of Individual Investors (AAII) shows the bullish-bearish ratio (percentage of bulls minus percentage of bears) has been negative for five consecutive weeks – a backdrop he believes leaves room for unexpected upside.
"When the stock market is at historical highs but investors are pessimistic, we've also found this skeptical sentiment among institutional clients. I think most institutions are preparing for defensive strategies from September through year-end, which is also why I think the stock market might see unexpected gains," he further explained.