Tom Lee's Squawk Box Call: Bitcoin Breakout Expected by Month-End as Markets Brace for Volatile 2026

During a recent CNBC Squawk Box appearance, Fundstrat Global Advisors co-founder Tom Lee doubled down on his bullish crypto outlook, predicting Bitcoin could hit a new all-time high by the end of January 2026. The analyst also outlined an aggressive equity forecast, projecting the S&P 500 to reach 7,700 by year-end, underscoring his conviction that despite near-term turbulence, both crypto and traditional markets are poised for substantial gains. His comments come after digital assets experienced a late-2025 pullback, positioning January as a potential inflection point for the broader market recovery.

Bitcoin’s Peak Still Ahead—January Represents the Window

Lee emphasized that Bitcoin has not yet peaked, despite earlier predictions that fell short of expectations. “We were overly optimistic about achieving the high-water mark before December, but I do believe that bitcoin can hit a new all-time high by the end of January 2026,” he stated. This marks a notable escalation in Lee’s long-standing crypto bull thesis. In August, he had predicted Bitcoin would surpass $200,000 before year-end 2025—a call that proved overoptimistic. Bitcoin ultimately reached an all-time high above $126,080 in October 2025, well short of the August projection, and traded around $88,500 on December 31, 2025.

At current levels of $84,460, Bitcoin remains positioned for a potential January breakout, according to Lee’s analysis. The analyst cautioned against dismissing any cryptocurrency as having already peaked, extending this view to Ethereum and other digital assets that may surprise to the upside.

2026 Split Strategy: Digest Now, Rally Later

Lee framed 2026 as a year of two distinct halves, marked by initial volatility followed by significant strength. “The first half of 2026 may be tough as we deal with institutional rebalancing and a ‘strategic reset’ in the crypto markets, but that volatility is exactly what sets the stage for the massive rally we expect in the back half,” he explained.

The institutional repositioning anticipated in the first half is not indicative of structural weakness in crypto, Lee emphasized, but rather a natural digestion phase following years of outsized gains across risk assets. This framing suggests the near-term turbulence should be viewed as a buying opportunity rather than a signal of longer-term weakness. The analyst remains constructive on the longer-term trajectory, setting up a potential inflection point in mid-2026 when market conditions stabilize.

Ethereum’s Supercycle: Why Lee Sees Massive Appreciation Potential

Lee expressed particular bullish conviction on Ethereum, arguing that the asset is entering a multi-year expansion phase reminiscent of Bitcoin’s explosive 2017–2021 bull run. Last year, he had called for Ethereum to reach an all-time high of $15,000 by December 2025—another prediction that missed, as ETH’s peak in 2025 was $4,830. The cryptocurrency currently trades at approximately $2,830.

Despite this miss, Lee’s Ethereum conviction appears unshaken. His firm’s crypto mining subsidiary, Bitmine Immersion Technologies, recently acquired additional Ethereum holdings, now totaling 4.14 million ETH across its portfolio. Lee justified the strategic accumulation in terms that went beyond traditional speculation: “Our belief is that Ethereum is dramatically undervalued. We believe ETH is entering a supercycle similar to Bitcoin from 2017 to 2021.”

He further framed Ethereum exposure as a balance-sheet imperative rather than a speculative trade. “Acquiring an asset that can appreciate by 10 times or more is a strategic necessity for any modern treasury,” Lee said, signaling his view that institutional adoption of Ethereum will accelerate significantly in the coming years.

S&P 500’s 7,700 Target: AI and Earnings as Growth Engines

Beyond crypto markets, Lee outlined one of Wall Street’s most aggressive equity forecasts, calling for the S&P 500 to reach 7,700 by year-end 2026. This projection reflects his confidence in sustained corporate earnings resilience and productivity gains driven by artificial intelligence deployment across the economy.

“If you look at the fundamental strength of the U.S. economy and the AI-driven productivity gains, we are looking at a path to S&P 7,700 by year-end 2026,” Lee stated. “This is supported by an EPS story that is far more resilient than the bears are giving it credit for.” His analysis suggests that corporate profit growth—not just multiple expansion—underpins the equity upside case, lending credibility to a market environment where both valuations and underlying earnings power expand simultaneously.

2026 Outlook: Volatility as Opportunity

Across all asset classes, Lee framed the anticipated volatility in 2026 not as a warning but as an opportunity for patient investors. The combination of institutional rebalancing, AI-driven productivity shifts, and the natural digestion of 2024–2025 gains suggests a year where tactical pullbacks create entry points rather than structural risks.

“There’s a lot to be optimistic about in 2026,” Lee concluded, encapsulating his overarching thesis: that volatility and consolidation in the first half will set the stage for significant advances in crypto, equities, and the broader risk-asset complex by year-end.