Tom Lee, head of research at Fundstrat, warned investors on Tuesday to brace for a “painful decline” across crypto and stock markets in 2026, citing geopolitical tensions and tariff risks. He made the remarks in an interview on The Master Investor Podcast with Wilfred Frost, saying a late-year recovery remains possible.
Lee projected a stock market correction of about 15%–20% this year and tied a year-end rebound to a more dovish US Federal Reserve and the end of quantitative tightening. He added, “I think we really finish the year strong.”
On digital assets, Lee expects Bitcoin to reach a new all-time high in 2026 but did not reiterate his prior $250,000 forecast. “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.” (Ed. note: the Oct. 10 crash wiped out roughly $20 billion in leveraged crypto positions.)
Lee said deleveraging cycles have hurt crypto liquidity and market makers, calling them the “central bank of crypto.” He warned that mainstream adoption and increased institutional support are needed to stabilize markets.
He flagged energy and basic materials as likely sector winners and recommended holding gold, while noting the White House may influence sector leadership by picking “winners and losers.” Lee also shared commentary on X, and analyst Benjamin Cowen of Into The Cryptoverse shared a similar metals outlook on X, warning metals may later correct.
