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Tom Lee called a historic Q4 stock rally on television, and the Fed raised rates less than 24 hours later. Now Bitcoin, Ethereum, and XRP face a much steeper climb than Lee’s bullish case lets on.
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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.
Why Tom Lee Thinks the Q4 Rally Breaks Records
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.
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.
Yardeni Cut His Q4 Target One Day Later
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. The10-year Treasury yieldreached 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 theFed delivered its rate decision, and equity indexes fell the following day.
Why a Stock Rally Does Not Guarantee a Bitcoin Rally
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.
Can Bitcoin and XRP Hit New Highs This Year?
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 | MSTR Price Prediction), 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 theJuly 30, 2026 8-K.
The version ofTom Lee’s forecastthat 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.
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Sam Daodu is a crypto analyst who’s spent nearly a decade making blockchain understandable—no easy task when most whitepapers read like fever dreams. He writes for 24/7 Wall St., covering Bitcoin, altcoins, and crypto market analysis for investors. Before crypto, he was a tech writer (back when explaining “the cloud” was peak innovation). Since 2018, he’s written for CoinTelegraph, Yahoo Finance, The Block, Cryptonews, Zypto, Rain, and more—basically anywhere people want crypto news without the headache. Sam runs MacLabs Marketing, a content agency for crypto brands tired of sounding like AI wrote their website. He also publishes free crypto education on his site for Web3 enthusiasts who think “gas fees” is a typo. When he’s not writing or staring at charts, Sam’s either: – Watching anime (currently convinced One Piece has better tokenomics than most altcoins) – At the gym sculpting himself into a Greek god – Listening to the music your mum warned you only bad boys listen to Connect: LinkedIn | Email | MacLabs Marketing
Source: 247wallst.com