Bitcoin remains susceptible to large swings and could lose up to half its value under certain conditions, BitMine chairman Tom Lee cautioned.
“I’m sure there will be 50% drawdowns,” Lee said in a Thursday interview with crypto entrepreneur Anthony Pompliano.
Some market participants have recently argued that Bitcoin’s volatility may ease as spot Bitcoin ETFs and growing institutional involvement bring greater stability. However, Lee emphasized that Bitcoin still mirrors the stock market and often magnifies its movements.
“The stock market has more frequent 25% drawdowns,” he noted. “We’ve had an unusually large number of 25% drops over the last six years.” He added, “So if the S&P is down 20%, Bitcoin could be down 40%.”
Bitcoin entering a “longer cycle”
Lee also highlighted that Bitcoin appears to have broken from its typical four-year cycle, which would have suggested a peak in October. Instead, he sees a “longer cycle” now emerging for the cryptocurrency.
Bitcoin could face steep drops despite bullish forecasts
Speaking on the Bankless podcast earlier this month, Tom Lee reaffirmed his projection for Bitcoin to reach $200,000 to $250,000 by year-end. A 50% correction from that level would bring BTC back to roughly $125,000, near its current all-time high.
If Bitcoin has already peaked, as some four-year-cycle proponents suggest, a 50% decline from its current price of $109,981 would take it down to around $54,990, a level last seen in September 2024, according to CoinMarketCap.
Veteran analysts warn of potential drawdowns
Lee is not alone in cautioning about possible sharp drops. Veteran trader Peter Brandt recently noted that Bitcoin’s chart resembles the soybean market pattern from the 1970s, which preceded a roughly 50% collapse.
Historically, Bitcoin has experienced steep declines within short periods. For example, after hitting a record high of $69,000 in November 2021, BTC plunged about 50% to around $35,000 in just over three months by late January 2022.
Some remain optimistic
Despite these warnings, other Bitcoin advocates remain confident that future declines won’t be as severe. Strategy chairman Michael Saylor stated in June, “Winter is not coming back.”
