Is Bitcoin Really Safe From a Major Crash? Tom Lee Thinks Otherwise

Despite growing confidence from Wall Street and the rise of institutional investment, market strategist Tom Lee is warning that Bitcoin is far from crash-proof. The BitMine chair says that even with record levels of adoption, the world’s largest cryptocurrency could still drop by as much as 50%.

In an interview with crypto investor Anthony Pompliano, Lee argued that Wall Street’s embrace of Bitcoin has created a false sense of security among investors.

Many believe that spot Bitcoin ETFs and institutional participation will stabilize prices. Lee disagrees, calling that view “dangerously optimistic.”

He explained that even traditional markets, like equities, regularly experience steep declines:

“The stock market often sees 25% pullbacks,” Lee said. “If the S&P 500 drops 20%, Bitcoin could easily fall 40%.”

Lee emphasized that while institutional adoption may bring legitimacy, it doesn’t change Bitcoin’s core market dynamics — volatility and emotional trading remain key drivers.

Lee supported his warning with historical data. Bitcoin’s price history is filled with dramatic boom-and-bust cycles, where rapid rallies are often followed by deep corrections.

For instance, the cryptocurrency hit an all-time high near $69,000 in November 2021, only to lose half its value by early 2022.

Such crashes, Lee said, highlight that volatility is not a temporary phase but a defining feature of Bitcoin’s behavior.

Even in traditional markets, he noted, strong assets can experience similar declines:

“In the past, even top-performing assets have fallen 50% during downturns,” Lee remarked.

The takeaway, according to Lee, is that Bitcoin’s resilience doesn’t make it immune — it just means investors must be prepared for large swings, no matter how institutionalized the market becomes.