If you're planning your investment strategy for 2026, Wall Street analyst Tom Lee has some news that might make you buckle up. He's calling for a rough first half of the year with markets potentially dropping 10-15%, but here's the twist: he expects everything to bounce back strongly in the second half.

A Tale of Two Halves

Lee, who chairs BitMine Immersion Technologies Inc. (BMNR), thinks 2026 could play out like 2025 did—starting bearish before transitioning into a bull run. And honestly, that pattern held up pretty well for equities this year. The S&P 500 and Nasdaq Composite both recovered sharply after those painful early April selloffs.

So what's going to drive the recovery? Lee points to "pro-business regulations," especially those related to artificial intelligence, the upcoming mid-term elections, and new Federal Reserve leadership. These factors, he says, could prove "kinda good" for markets.

"It's really going to come back in force, but it will take maybe the first half of the year to get through that because we don't have a new Fed in the first half," Lee explained. "So, I think the first half next year could be down 10 to 15% and then a big recovery."

The timing matters here. Without new Fed leadership in place during the first six months, Lee expects markets to struggle before catching their second wind once policy changes take effect.

Crypto's Best Years Are Still Coming

Despite the recent turbulence in digital assets, Lee remains decidedly bullish on cryptocurrency's long-term trajectory. When it comes to Bitcoin (BTC), he believes "the best years are definitely ahead," and he's got some interesting numbers to back that up.

"Today there are only four million Bitcoin wallets with $10,000 in them. There are 900 million IRA and brokerage accounts globally that have $10,000. So that's a 200 times larger market," Lee stated.

That's a compelling way to think about Bitcoin's potential adoption curve. If even a fraction of those traditional investors move some money into crypto, the growth could be substantial.

Like the stock market, cryptocurrencies bounced back from April lows to hit peak valuations in early October. But since then, they've taken a sharp nosedive, wiping out all the gains recorded so far in 2025. It's been a wild ride, to put it mildly.

Not Worried About AI Valuations

Lee also weighed in on concerns about inflated artificial intelligence valuations last week, calling such worries shortsighted. He argued that investors fretting about "absurd" AI valuations are missing how exponential industries typically develop. According to Lee, most of the long-term value in transformative technologies emerges later in adoption cycles, even when early valuations look stretched.

Putting money where his mouth is (or where his firm's mouth is, anyway), BitMine Immersion recently purchased another 102,259 Ethereum (ETH), bringing its total holdings to approximately 3.97 million ETH. At current prices, that stash is worth about $12.2 billion. That's a serious bet on crypto's future.

How The Stock Performed

BMNR shares fell 0.16% in after-hours trading after closing 11.22% lower at $30.95 during Monday's regular trading session.

The stock shows a weaker price trend in the short and medium term but demonstrates a more positive outlook over the long-term horizon, suggesting volatility might be part of the package for investors interested in this crypto-focused play.