Tom Lee Predicts September Fear May Spark Stock Rally and Push Bitcoin Toward $150,000

Fundstrat’s Tom Lee is treating the prevailing fear of a September market crash as a contrarian indicator. He argues that a market braced for weakness could instead rally, potentially lifting Bitcoin (BTC) toward $150,000.

Historical Context of September Slumps

Lee points to data from ten U.S. midterm election years since 1986, where the average stock market low occurred on September 2, following an average decline of 16.77% from the prior high. This pattern informs his view of the current September risk.

Fed Policy and Market Expectations

Recent Federal Reserve actions add a hawkish dimension: three Fed governors voted for a July rate hike, and Chair Kevin Warsh emphasized inflation in his Jackson Hole speech. Six‑month PCE inflation stands at 4.1%, and the 30‑year Treasury yield remains above 5%, well above the effective fed funds rate of roughly 3.63%.

Lee’s Base Case for September 15

Lee expects the Federal Reserve to hold rates steady at its September 15 meeting—neither cutting nor raising. In a CNBC interview he said, “If the Fed doesn’t cut, doesn’t hike, which is our base case, I think actually the markets could rally very strongly.” He forecasts the S&P 500 could start October above 8,000, with a possible low near 7,300.

Bitcoin Outlook

Bitcoin is trading around $78,875, roughly 37% below its October 2025 record. Lee describes the past year as a “shallow crypto winter” driven by forced selling rather than broken fundamentals. He cites four catalysts for a Bitcoin rally:

• Crypto outperformed other macro assets in Q3.
• The four‑year crypto cycle is set to end next month.
• Korean traders are rotating from AI stocks back to crypto.
• The CLARITY Act, a U.S. market‑structure bill, could clarify regulatory oversight for digital assets.

Rising institutional inflows into crypto ETFs also suggest larger investors are positioning for a strong fourth quarter. Lee maintains a target of $150,000 for Bitcoin, representing roughly a 1.9‑times gain.

Key Takeaways

Lee’s outlook hinges on weak jobs and inflation data ahead of the Fed meeting; softer readings could diminish expectations of a rate hike and support both equity and Bitcoin rallies.