Fundstrat head of research Tom Lee warned that crypto and equity markets could face a painful decline early in 2026 amid geopolitical tension.
Lee said the year could mirror 2025, with long-term tailwinds for blockchain and AI offset by tariffs and political division.
He forecast a 15% to 20% stock market correction before a stronger finish later in the year.
“I think we really finish the year strong,”
Tom Lee said, citing a more dovish US Federal Reserve and the end of quantitative tightening.
Lee said government policies picking economic winners and losers could shape sector performance.
He reiterated expectations that Bitcoin will reach a new all-time high in 2026.
“I think 2026 will be a really important test because if Bitcoin makes a new all-time high, we know that that deleveraging event is behind us,”
Tom Lee said.
Lee said previous deleveraging cycles weakened market makers and caused crypto to lag behind gold.
He added that limited institutional adoption continues to leave crypto vulnerable to market shocks.
Other analysts said metals could again outperform crypto in 2026 despite expectations of a later correction.
At the time of reporting, Bitcoin price was $89,464.77.