Tom Lee assessed the prospects of Bitcoin until the end of January

A long term strategist explains why short term volatility may still lead to higher crypto prices.

Bitcoin's Peak May Still Lie Ahead

When Tom Lee, chairman of the board at BitMine and co founder of Fundstrat, talks about timing in crypto markets, he does so with measured confidence. Lee recently stated that Bitcoin could reach a new all time high by the end of January 2026, even as volatility remains elevated.

His message to investors is straightforward. The market pause seen recently does not signal exhaustion. Instead, Lee views it as a temporary recalibration after years of aggressive growth.

Volatility Does Not Cancel Opportunity

Lee openly acknowledged that the market is likely to remain volatile in the near term. Price swings, in his view, are part of the process rather than a warning sign. He stressed that such turbulence should not be mistaken for a completed cycle.

"I don't think Bitcoin has peaked yet," Lee said, explaining that expectations for a December record were overly optimistic. His belief is that Bitcoin still has room to surprise on the upside before January closes, despite sharp intraday and weekly moves.

Why December Missed the Mark

According to Lee, the market simply moved too far ahead of itself late last year. Optimism accelerated faster than capital flows could justify, leading to a short cooling period. That reset, he argues, is healthy.

Rather than undermining Bitcoin's trajectory, the delay may strengthen it. Markets that pause to absorb gains often build sturdier foundations than those that sprint without rest.

A Strategic Shift Among Large Investors

One of Lee's more important observations centers on changing institutional behavior. During the first half of the year, he expects large investors to adjust their strategies and reengage with crypto markets in a more deliberate way.

This shift, combined with what Lee described as a strategic relaunch of the crypto industry, could lay the groundwork for steadier and more sustainable growth. From a long term perspective, that kind of capital tends to stay invested longer and sell less impulsively.

Market Reformatting, Not Structural Damage

Lee rejected the idea that the recent slowdown points to deeper flaws. In his assessment, the crypto market is undergoing a reformatting phase after roughly three years of excessive expansion.

Such phases are common in developing asset classes. Excess leverage clears out. Speculative behavior cools. What remains is a more balanced market structure, better suited for long term appreciation.

Ethereum's Position Resembles Bitcoin in Early Years

While Bitcoin captures most headlines, Lee devoted special attention to Ethereum. He believes Ethereum is still early in its growth cycle and currently resembles Bitcoin's position back in 2017.

In Lee's view, Ethereum is only now entering what could become a supercycle, marked by growing institutional interest and broader portfolio inclusion. Over the next few years, he expects more companies to add Ethereum exposure, strengthening demand and market depth.

Bitcoin Versus Ethereum in the Current Cycle

Lee's comparison highlights an important distinction. Bitcoin, while still capable of new highs, is already a mature asset by crypto standards. Ethereum, on the other hand, remains in an expansion phase where use cases and adoption continue to widen.

That dynamic suggests different risk and reward profiles. Bitcoin may offer leadership and stability, while Ethereum could present longer runway growth as adoption accelerates.

Retail Sentiment Still Matters

Although institutions play an increasing role, Lee's outlook does not dismiss the influence of smaller investors. Earlier commentary from Brian Quinlivan of Santiment highlighted that near term price action will still depend heavily on retail sentiment and behavior.

Retail investors often drive short term momentum, especially during periods of heightened emotion. Lee's framework suggests that while retail flows may shape weekly moves, institutional shifts will define the broader trend.

A Long View on Crypto Growth

From Lee's perspective, patience remains the defining virtue. Short term pauses and volatility are simply the cost of participation in a young market that has already grown rapidly.

His expectation of a potential Bitcoin record by late January reflects confidence not in hype, but in structural evolution. As capital becomes more strategic and less impulsive, the market may trade more constructively.

What Investors Can Take Away

Tom Lee's assessment offers a reminder that timing the final top is rarely productive. Markets often move higher after shaking out weak conviction.

For investors with a longer horizon, Lee's message is reassuring. Bitcoin may not be finished climbing, Ethereum may be earlier than many assume, and the current pause may prove to be a quiet setup rather than a warning sign.