Crypto expert Tom Lee has made some bold predictions for Bitcoin, Ethereum, and even the S&P 500 in the coming months. He believes January could kick off a very strong start to the year for investors.

Lee, co-founder of Fundstrat Global Advisors, recently shared that he still sees major upside potential for Bitcoin. Even though prices fell toward the end of last year, he remains confident that the crypto market is far from done rising. In a recent appearance on CNBC’s “Squawk Box,” Lee said he expects Bitcoin to hit new highs soon, possibly by the end of this month.

Bitcoin ended December trading around $88,500, which was a drop from its October peak of $126,000. This dip worried many traders who feared the bull run was over. But Lee sees it differently. He thinks the recent slowdown is just a short break before another big move up.

One key reason for Lee’s optimism is institutional investment. Big financial players typically rebalance their portfolios at the end of the year, and Lee expects that once that process is done, more money will flow into Bitcoin. He also highlighted a major reduction in market leverage back in October. This clean-up removed a lot of risky bets and could make way for a healthier and more sustainable rally.

Lee is not just bullish on Bitcoin — he’s also very optimistic about Ethereum. He believes Ethereum is currently undervalued and compares its current situation to where Bitcoin was in 2017, right before a massive price surge. He tracks the ratio between Ethereum and Bitcoin prices to predict future movements.

If Bitcoin reaches his long-term target of $250,000, Lee thinks Ethereum could jump to anywhere between $12,000 and $22,000. This would depend on how much the market begins to see Ethereum as a major platform for payments and smart contracts.

To show confidence in this outlook, his company Bitmine Immersion Technologies has been buying up Ethereum. They now hold over 4 million ETH tokens on their balance sheet. Lee believes this kind of investment is smart for any company looking to grow its treasury with high-potential assets.

That said, Lee warns that the path won’t be smooth the whole way. He expects 2026 to be a challenging year in the beginning, calling it a time for a “strategic reset” in crypto. Institutional investors will likely move money around during this period, causing price swings. However, Lee sees this volatility as a setup for an even stronger rally in the second half of 2026.

This pattern — slow start and fast finish — is common in high-growth sectors. Traders who can handle the early ups and downs may be rewarded later with big gains.

Lee’s optimism doesn’t stop at crypto. He also predicts a huge rise for the U.S. stock market. He believes the S&P 500 could reach 7,700 points by the end of the year, thanks largely to strong economic growth and increasing adoption of artificial intelligence (AI). According to him, companies using AI are becoming more efficient and profitable, helping push earnings higher even if some investors remain doubtful.

In short, Tom Lee sees big opportunities ahead — not just in Bitcoin and Ethereum, but across financial markets — with January possibly kicking off a powerful year for growth.