Tom Lee Says Q4 Could Bring One of the Biggest Rallies of Our Lifetime. Can Bitcoin, Ethereum, and XRP Reach New Highs?
Lee chairs BMNR, the largest corporate Ethereum treasury, creating a conflict, while MSTR sits on an $8 billion unrealized Bitcoin loss.
Bitcoin now tracks gold more than the Nasdaq, breaking the stocks-up-crypto-up trade that defined the last cycle.
Bitcoin needs a 50% gain to reclaim its prior high and XRP needs to more than double, making new records by December 2026 unlikely.
Just released. Our analysts combed the entire stock market and named the ten best stocks to buy right now, and MicroStrategy didn't make the cut. Enter your email to see the names that beat MSTR. The report is free. Enter your email and see if any of your stocks made the cut.
Tom Lee went on television September 15 and called one of the biggest rallies of our lifetime for the final stretch of 2026. Less than 24 hours later, the Federal Reserve raised rates and left the door open to another hike.
That puts Lee's call in a different light because his forecast is for U.S. stocks, while crypto investors are more interested in whether the conditions behind that rally can also lift Bitcoin and XRP. The question now is whether Lee's bullish case can survive the Fed's latest move and, if it does, how much of that rally could make its way into crypto prices.
Tom Lee's argument focuses on what he expects to happen once the Fed's path becomes clearer. He believes a large pool of cash in money-market funds could move back into riskier assets as investors become more comfortable with the direction of interest rates.
He told CNBC that the fourth quarter "could be one of the biggest rallies, and I think it continues next year to one of the biggest rallies of our lifetime," while arguing that the market has not reached peak earnings yet. He has also put a number behind that view, calling for the S&P 500 to clear 8,200 by year-end, with technology stocks and the Magnificent Seven leading the move.
24/7 Wall St has helped investors make money for over two decades, and our top analysts just finished ranking the definitive Top 10 Stocks To Buy Now . Not the ten biggest companies. Not the ten everyone is arguing about. The ten best stocks to buy right now.
The report is free, and you can see why we think each stock is a top investment today.
A rally that large can create plenty of opportunity, but knowing when to get out matters just as much, which is why we put together our free bubble survivor's handbook.
Ed Yardeni, who had one of the highest year-end S&P 500 targets on the Street, does not share Lee's view. He cut his target to 7,900 from 8,400 just one day after Lee made his bullish case on television. Yardeni moved the old 8,400 target to mid-2027 and raised the odds he assigns to a bearish scenario from 20% to 30%, although he kept his end-of-decade target at 10,000.
Yardeni wrote that "the risks of a downturn have increased over the next three to six months," pointing to higher energy prices and stubborn Treasury yields. The 10-year Treasury yield reached 5.00% on September 15, its highest level of the past year and 6.8% above where it stood a month earlier.
Yardeni also lowered his forward price-to-earnings assumption, which measures how much investors are paying today for the profits companies are expected to produce next year. Then the Fed delivered its rate decision, and equity indexes fell the following day.
For years, when technology stocks rose, Bitcoin often moved higher with them, but that relationship has become much less reliable. Correlation measures how closely two assets move together, from -1 for opposite moves to +1 for closely aligned moves, and Bitcoin's three-month correlation with the Nasdaq 100 has fallen sharply while its relationship with gold has climbed to its highest level in years.
That leaves Bitcoin, Ethereum, and XRP with a much bigger job than simply waiting for the S&P 500 to rally. Bitcoin (CRYPTO:BTC) trades at $76,600, down 34% from $116,484 a year ago, meaning it would need roughly a 53% gain to return to that level. XRP (CRYPTO:XRP) trades at $1.30, down 56% from $3.09 a year ago, and returning above $3 would require more than a 130% gain. Ethereum (CRYPTO:ETH), trading at $2,470, needs a 100% gain. A stronger stock market could help crypto, but the old assumption that Bitcoin simply follows tech stocks no longer tells the whole story.
A return to record highs by December 31 looks like a much bigger hurdle for Bitcoin and XRP than Lee's stock-market call might suggest. Lee's forecast is built around a strong fourth quarter for stocks, but the Fed's latest decision has made the rate path less straightforward, with another hike still on the table. Strategy ( NASDAQ ), the largest corporate Bitcoin treasury, also shows how quickly a crypto pullback can flow through corporate balance sheets, with 846,000 BTC and an $8.32 billion unrealized loss reported in its Q2 results in the July 30, 2026 8-K.
The version of Tom Lee's forecast that would matter most for crypto is one where October 2026 proves to be the final rate hike, Treasury yields retreat from the 5% level, and the V-shaped recovery described in BitMine's November 21, 2025 8-K begins to take shape.
That combination could give Bitcoin and XRP enough room to recover from their current drawdowns, but reaching new records would require a much larger move.
If you have cash sitting in your account right now, give this two minutes. After more than two decades of helping investors beat the market, our top analysts at 24/7 Wall St. put together a definitive report on the Top 10 Stocks To Buy Today. And MSTR wasn't one of them.
Contact editorial@247wallst.com for any questions or corrections.
