Tom Lee, the head of research at Fundstrat Global Advisors and Chief Investment Officer at Fundstrat Capital, expects Bitcoin to reach a record price of $200,000 before the end of 2025, noting that the decisions of the Federal Reserve will be the most influential factor on the cryptocurrency market in the coming period.
Lee spoke in an interview with the Squawk Box program on CNBC, explaining that Bitcoin and other cryptocurrencies like Ethereum are highly sensitive to U.S. monetary policy. He emphasized that if the Federal Reserve moves towards accelerating the pace of interest rate cuts, it could pave the way for a very strong fourth quarter in terms of Bitcoin's performance and the cryptocurrency market in general.
Lee's comments came amid recent data showing weakness in the U.S. labor market, as bond markets are now expecting three interest rate cuts this year, compared to the Federal Reserve's forecast of only two. Lee stressed that the slowdown in hiring has become apparent, adding that once the labor market begins to decline, reversing this trend quickly is difficult, which may prompt the Fed to expedite its decisions.
Lee explained that any additional interest rate cuts could strengthen the housing market, boost corporate confidence, and support the economy overall, which would positively reflect on Bitcoin and cryptocurrencies. He added that historically, Bitcoin tends to achieve significant gains in the fourth quarter, especially during periods when the Federal Reserve is leaning towards monetary easing, referencing similar experiences in 1998 and 2024.
Lee also pointed out that stocks typically perform well during periods of expansionary monetary policy, and cryptocurrencies like Bitcoin, which often move in parallel with stocks, can benefit even more. He clarified that this relationship positions Bitcoin as one of the main potential beneficiaries of any new cycle of interest rate cuts in the United States.
Lee affirmed that Ethereum is also a candidate for strong gains if small-cap stocks continue to rise, adding that the markets are still cautious and the prevailing pessimism among investors provides ample room for Bitcoin and cryptocurrencies to rise if the Federal Reserve decides to implement strong interest rate cuts before the end of the year.
Thus, Lee directly links the future of Bitcoin and cryptocurrencies to U.S. monetary policy, considering that 2025 could be an exceptional year if the right conditions are met, with the possibility for Bitcoin to reach $200,000, writing a new chapter in the journey of cryptocurrencies.
