Lee Sees Strong Rally If Fed Holds Rates, Predicts Bitcoin 'First Leg Up'

Tom Lee, co-founder of Fundstrat and chairman of Bitmine Immersion Technologies (BMNR), believes that if the Federal Reserve leaves interest rates unchanged at its September 15 meeting, the stock market could experience a strong rally. According to Lee, his base case is that the Fed does not hike rates, which could result in a mid-month market rally.

Lee previously expected a 10% market correction in September but now thinks mounting concerns about the Fed, AI spending, and seasonal weakness might fuel a rally instead. He points to the S&P 500's potential for gains of around 3% in August as evidence that the market is recovering after two consecutive months in the red.

In terms of Bitcoin (BTC), Lee sees the recent rally as 'the first leg up' and expects institutional allocation to strengthen in the fourth quarter. He notes several catalysts could drive this, including regulatory progress, such as the potential passage of the Clarity Act, which could happen this year.