U.S. stocks have been on a tear in the past year, but Wall Street legend Byron Wien thinks a correction will hit the market this year. He also sees bitcoin coming under the regulatory microscope and the Trump family surviving Robert Mueller's investigation.
Wien, a vice chairman at Blackstone and a 50-year veteran of Wall Street, said in his annual list of market surprises that speculation in the market could reach an extreme in 2018 as the U.S. economy has a better year than 2017, pushing the S&P 500 down toward 2,300. The traded at 2,691 on Tuesday, more than 14 percent above 2,300.
Wien has been publishing his list of surprises since 1986. He defines a "surprise" as something the average investor would assign only a 33 percent chance of taking place, but which he thinks has a more than 50 percent chance of happening.
The S&P 500 rose 19.4 percent in 2017 and hit record highs. The broad stock index also hasn't experienced a 10 percent correction since January 2016.
Wien also said higher interest rates could contribute to the S&P 500's correction this year. The Federal Reserve expects to raise rates three times this year as it rolls back the stimulative policies it implemented after the financial crisis. The central bank hiked rates three times last year.
Another surprise listed by the Wall Street legend is regulators scrutinizing bitcoin more closely. Wien said the risks in the cryptocurrency "are so great" that authorities could start to restrict trading.
"Among their concerns are: no regulatory oversight; no safety and soundness measures; no recourse in the event of mistaken or miscalculated transactions; high cyber risk; no deposit insurance," he said.
Bitcoin skyrocketed 1,289 percent last year, according to the Coindesk price index.
Another surprise listed by Wien is special counsel Robert Mueller's investigation not implicating the Trump family in "collusion with Russian operatives" regarding the U.S. election.
WATCH: Wien says fundamentals strong, but market overbought
