Hedge fund billionaire Paul Tudor Jones knows that the stock market is facing a reckoning as the Federal Reserve continues its cycle of raising interest rates to combat inflation.

"Obviously, what typically starts bear markets is interest rates get so high they click it," Jones told CNBC on Friday in an interview with Jim Cramer. "We're clearly going through a tightening cycle. At some point, they're going to stop."

On "Mad Money," Jones said he uses the 1999-2000 dotcom bubble and the financial crisis as references when faced with the question of whether stocks could enter a bear market.

"If we just think about the stock market, when everyone says 'What do you think about the stock market? Are we going to go into a bear market?' ... I go back and I think about the '99-2000 top, the '06-'07 tops," he said. "So, in 2000, when they stopped [raising rates], the market went back and re-tested the old highs."

The stock market has seen increased volatility since the Fed's most recent rate hike in late September. Shortly after the hike, Fed Chair Jerome Powell said interest rates were "a long way" from neutral, meaning neither accommodation nor restrictive to U.S. economic growth.

"I think you'll have a chance to see the old highs revisited if and when and before we go into a bear market," Jones said. "I'm thinking through the end of the tightening cycle, the pause, the excitement around that pause, and then I think, boy, then you've got to pay attention. Then you've got to pay attention. We'll probably rally after whenever they finish [tightening]. Then you have to pay attention."

October's historic volatility sent stocks lower still, with the market shedding nearly $2 trillion of value over the course of the month. The Fed is expected to raise interest rates once more in December and three more times in 2019.