Tom Lee: "The Crypto Bull Market Just Started”, How ETH Hits $50,000 Transcript, AI Summary & Key Points

00:00 But on the crypto, yeah, I mean, crypto bull market just started. >> Today, I sit down with 30-year market veteran Tom Lee. >> I've been a research analyst for the last 30 years. I'm the founder of uh one of the largest independent research firms called Fundstrap and I'm also the chairman of Bitmine Immersion Technology, which is the largest holder of Ethereum in the world.

00:21 as he shares his outlook for crypto in 2027 and beyond. >> I think this is going to be potentially one of the biggest ever crypto bull cycles that we've seen. >> The looming stock market AI bubble. >> People who call things a bubble early are not actually smart. They're the ones who've actually missed out on on the rally. And the one thing that could absolutely kill this upcoming crypto bull market, >> the single entity that has killed every bull market um is >> watch today's entire conversation.

00:52 >> The best practical financial advice that I've heard and I'm going to share this with everyone >> so you understand everything. Do you think Ethereum will always stay number two to Bitcoin or is the addressable market bigger? Including the single greatest trade in markets that most don't see yet. The easiest trade like I'd say like quote alpha or it'll be a high sharp ratio to me is >> click subscribe so you never miss conversations like this and let's start.

01:20 And you started your career at JP Morgan from I believe 1999 to 2014. You saw multiple bubbles pop. Um could you just go over some of your biggest wins that you had that nobody saw at the time? >> Glad to. uh and foremost actually I started in the early 90s at Kitter Peabody um and then Solomon Brothers and then JP Morgan before starting Funstrap. Uh I grew up as a technology analyst in the early 90s.

01:50 Um self the cell phone industry and internet grew up concurrently uh and they were both scurve industries. When I started there were only 56 million cell phones in the world. Today there's roughly 9 billion and that growth that S-curve growth took 30 years. Um, but a couple of things that I think are really my big takeaways over my career is number one, when I look back at the internet and mobile boom, even though that was a 30-year boom, the stocks associated with internet and mobile all peaked at the same time and

02:30 roughly 10 years into the cycle. So, if you're thinking about how AI plays out, it's going to be very similar in my opinion that you're going to see AI stocks peak really 10 years into this cycle, which would be if Chat GBT was 2023, 2033. Um, but I I'd say my takeaway really looking at a lot of these big huge boom and bust cycles because there was the internet boom and bust and then that was followed by a housing boom and bust and then there was a biotech boom and bust and then a crypto boom and bust.

03:06 Multiples of those and of course we had the COVID boom and bust. And uh you know my takeaways are number one, people who call things a bubble early are not actually smart. They're the ones who've actually missed out on on the rally. You know, I think a bubble is really historically correctly defined as when someone else is making money, you consider it a bubble, you know.

03:32 Um and uh second, when the bubble is bursting, the opposite's true. People have unrelenting optimism about the continued uh and staunch support of that in the face of terrible price action. Um now, in the in the middle of all that, there's always going to be a lot of corrections. Um, I mean that's what we've been telling our clients at Funstread about which is between 1993 and 1999 or 2000 which was the peak of the internet boom Cisco which is like the Nvidia of today four years into actually three years into that

04:16 first cycle. So 9 uh4 to 97 which really aligns with chat GBT 2023 to now had a 50% decline and it was because the Fed chair at the time said there was irrational exuberance and he actually then later followed it up by threatening to hike to slow the economy and then Cisco missed numbers and the stock fell by roughly half but a year later Cisco tripled off the bottom actually almost quadrupled.

04:45 So, uh, I think that's where we are today. Um, and I guess the other insight I'd point out is people never really get bottoms right, cuz at the bottom people always turn negative. And I think that's really evident with crypto and AI today that I think bottoms aren't when people flip positive. It's just people are unrelentingly bearish and price action is better.

05:06 So, in those early years, even before you found crypto, those were some of the big wins. What were some of like what was a mistake you made that you learned from early on in your career? Uh well, let me highlight I think common mistakes other people have made because I think that this might really speak to like so I think the audience tends to be very reliant on like quote experts, you know, or like what is their own common sense and maybe even like the expert on they're listening to aligns with their own thinking.

05:43 Therefore, they think that's what happens. The problem with that is that's what's called consensus. Like that's what everyone thinks. And if everyone thinks the same way, there's no opportunity to make money. You know, you have to essentially be contrarian. And I think the things that people make mistakes on and we see the common pitfalls today is that the best in my like in the internet period the best times to be buying the stocks.

06:15 Okay. The first best time, the number one best time is when everybody is negative, but the fundamentals diverge positively. Okay? And that's 100% like a win rate because if the trajectory is positive, but the stocks are selling off for other reasons or people think it's expensive, um, you're going to make money. The second best way to make money is of course when the cycle is so strong and people aren't bullish enough.

06:46 Um but uh the worst time to make money is when everyone's bullish and you can't really think of another reason to be more bullish. Okay? And that happened late in the cycle. And think of it this way. late in the cycle for internet there were all these companies going public but they were all pitching the same story and none of them were actually changing your life you know so I think that if you're thinking about AI and crypto if there's a point we're reaching where there is isn't really any reason that our lives would

07:23 get better from having uh this technology in our lives then I think you've reached the peak um but I don't think that's the case you know one in AI for instance there's still massive massive discoveries taking place um and companies are seeing huge payoffs from all this. So there's room for a lot of spending and displacement and in crypto it's just the earliest days of tokenization and transformation of the financial system.

07:50 I mean at the end of the day the banking system really wants to redo their settlement rails and it looks like it's going to be on crypto. So we're just at the front end of that move. So, let's uh I would want to hear your outlook on crypto specifically into 2027, but just for the audience at home, we're recording this the day of midterms, so we don't really know the US midterms where Congress went.

08:13 Um, what is your outlook for crypto specifically, if that even is affected by midterms in Q4? Um yeah, we again if your audience isn't in the US, you know, we have midterm elections today in the US and it just roughly one-third of the Senate and the entire House of Representatives has to be up for election and the prediction markets and polling are expecting Republicans to lose the Senate.

08:49 Currently, it's controlled by Republicans and then they're expecting the Democrats to take the House. That's both what the prediction markets and the polls are saying. So, I might say, you know, it's probably safe. Let's just say that that's a good base case. And then a surprise, of course, would be if Republicans keep the Senate. But that, let's just say for now, that's not the base case.

09:09 Uh, I the reason stocks and crypto have been selling off into a midterm election day is because if Democrats take control of Congress, well, they've been very vocal that they're anti-AI and they voted down the Clarity Act. So, they basically appear to be both anti-AII and anti-crypto and therefore, you know, stocks are have been under pressure into this election day.

09:37 It's a pretty unusual pattern because historically stocks trade well into mid midterm elections. And um but the reason I think that this is not actually bearish for tech and AI and it's not bearish for crypto is the following. First, um, even if the Democrats take the Senate and the House, it doesn't mean they can actually pass anti-crypto and anti-AI legislation because the president has veto power.

10:06 So unless the Senate gets six 2/3 of them of the House and two/3s of the Senate to vote in favor of the vetoed bill, they can't overturn a presidential veto. Okay. Now, the second reason, so basically, there isn't going to be any chance to get legislation done. If anything, you know, Congress's focus is going to just be trying to impeach President Trump.

10:41 Now, the second thing to keep in mind is that if the Democrats take the House and let's say if they even take the Senate, they're very likely to flip pro- data center and pro- crypto because now that they control Congress, the money that these data centers bring into the community and the the lobbying money that the crypto money would be spending would just go to the Democrats.

11:08 So they're very likely to support legislation because one it brings jobs and money and plus they're getting political support. So uh there isn't really political spending associated with anti-data center. Um there's a lot more pro data center money because it's basically like the entire technology industry. And um the third reason that I think tech and AI and crypto trade well after uh midterms is it's just seasonal.

11:35 You know, these stocks have priced in a lot of bad news and historically markets really rally after midterm elections. And then fourth and finally, there's an outside chance the Senate keeps stays Republican. And if it does, I I actually think that would be the biggest rally. I don't I'm not expecting it. I'm not, you know, I don't have any insider knowledge or inside insights, but if somehow the Republicans keep the Senate, that would be very, very positive.

12:05 >> And either way, you know, this is just a sort of noise for into 2027, the adoption cycle of tech, AI, crypto is getting bigger. Um, what is uh what is your investor's thesis going into 2027 and beyond? I know specifically for ETH and how that fits into crypto adoption. >> Yeah. Uh well, I'm going to say for 2027 equities, you know, we don't we're not talking about that until after I publish my own book, uh which is in early December.

12:33 But on the crypto, yeah, I mean, crypto bull market just started. Um you know, and you know, I not I think we're seeing this on ample display, but you know, because crypto winter basically ended, which was about a year, and now we're in a new bull cycle. I think crypto is going to still rise in the face of bad news and you know to me the cycle you know we always have to think about what's going to drive the cycle well the last two cycles one of the cycles was about NFTTS and the NFT boom and last year it was about

13:09 stable coins I think that this cycle is going to be very much about Wall Street adoption which is tokenizing not just dollars which are stable coins but tokenizing all assets assets and then building a lot of settlement rails on crypto. So, I think this is going to be potentially one of the biggest ever crypto bull cycles that we've seen. >> And Ethereum's uh uh position in that I know they're the biggest for stable coins.

13:37 They're the biggest for RWAs. You expect that to continue? Yeah, I think um you know what so what will characterize the cycle is the financial system essentially embracing blockchain as a way to protect themselves from AI. you know, AI is getting very good at exploiting uh structural vulnerabilities, you know, and that means that they can break into corporate databases and and cyber, you know, the cyber defenses of traditional companies and blockchain will provide a a chain of custody and record and smart contracts

14:20 that actually protect the financial system. I I think that that's gaining increasing appeal and public blockchains actually, you know, tend are going to be the most censorship resistance. So to me, uh I think this is going to be a lot about Ethereum and so people, you know, Bitcoin is still going to be important, but I think this this cycle is going to be very much about smart contracts and tokenization and the biggest platform out there is Ethereum.

14:46 >> Um when other blockchains mention faster and cheaper, like does that concern you at all? Uh well, historically, faster and cheaper of course had tradeoffs um and and and those trade-offs were trade-offs with security, but uh as you as many of the audience knows, you know, Ethereum already is in the process of implementing its own upgrades. So, as a layer 1, Ethereum uh is never is not going to have slow speed really be an issue anymore.

15:17 And on top of that, of course, many L2s or blockchains are running on Ethereum, settling on Ethereum, so using the Ethereum security model, but could offer ultra ultra high fast um and you know, network and transaction speeds. >> What inning do you think we're in for Ethereum adoption? >> Oh, we're in the earliest days. uh we're in the earliest days because every since 2009 which is the Bitcoin inception so 15 years sorry 17 years later that entire 17-ear period has been about individual adoption and self- sovereignty

16:04 um and essentially providing banking services to the unbanked um so crypto I think really flourished outside of developed countries. Um, and then of course in the US a lot of technology early tech adopters used Bitcoin and crypto. But this cycle I think is going to bring in a new wave of corporations and banks really using blockchain uh because of tokenized assets and we're already seeing it you know companies like Robin Hood you know these sort of leading edge financial services companies and generationally

16:39 significant. you know, Robin Hood is is the millennial's main financial provider. Uh are already making a big push into crypto. >> Do you think I mean this term gets thrown around so much? I I don't know what to think. Do you think we're in a super cycle for crypto? >> Uh yeah, I mean super cycle is a good word. I mean, I think for everyone it just it really means it's a long bull market and you know, past bull markets have had massive moves.

17:10 I mean, Ethereum in past moves gained 15 to 51 times its starting price. So, if we're at 25 2300 currently for Ethereum, you know, this this would be moves towards 50,000 for ETH. Uh, do I think that this cycle can play out in that manner? Yeah, I I I don't see why I wouldn't. >> It seems like Tom, I agree with you. It seems so obvious once you like do the research and do the homework about crypto and Bitcoin and ETH specifically to me seemed poised for institutional adoption.

17:52 What do you think? Do you think Ethereum will always stay number two to Bitcoin or is the addressable market bigger? Uh well, one, you know, Bitcoin today is the store value story. Uh and Ethereum was really uh basically like, you know, the financialization um of Wall Street. But I I think increasingly in my conversations with both uh traditional asset managers but also uh you know crypto people is that I I think things like Ethereum because they're essentially working capital you know it's proof of stake but people

18:32 are going to hold Ethereum uh because it's you know it is the it is essentially the collateral layer for a lot of transactions means that ETH itself self. Uh they call it a Lindy effect, but I think ETH is going to become a store of value. I think people are going to view ETH as money. Uh because it is the pair that's going to be the most widely used for tokenization.

18:58 So I I think as part of that narrative flip, ETH is money. ETH is held. You know, ETH is basically a store of value. I I think it could become more valuable or it should become more valuable than Bitcoin. And when you say when you talk about the long-term price thesis um up to $50,000 the bullcase it's like what the catalysts that drive that the most it is tokenization and stable coins it's it's a lot of things um you know there's a lot of folks that have long-term targets of Ethereum around 250,000 you know one of

19:33 them is Joe Luben uh from consensus and MetaMask um but there's others and Their rationale is that as ETH becomes store value, it starts to reflect the underlying the it becomes the base layer of whatever pledge collateral it holds. And I think that actually makes a lot of sense. I mean, for instance, the value of the dollar collectively is equal to the GDP that it's storing, right?

20:03 I mean, so in other words, like the dollar isn't we don't say the dollar is worth 1 one millionth of the the assets it's actually storing the value for. It's equal to the value of everything it's storing value for. And I think that that's going to be true of Ethereum. And uh historically, it's been tracking anyways. You know, if you look at the amount of assets on an RWA and tokenized basis, it's always been a multiple of the actual network value of Ethereum.

20:34 So, I'm I'm talking, you know, years in the future, but just as an as a retail participant, what signals should I be looking for to tell me the trend is going to change into into a bubble popping or a recession? I'm not talking about the 30% down trends or the 50. I'm talking about like the big one. What do I look for? Well, uh, I mean, first of all, I think it's very early because I don't think we're anywhere near a top for crypto.

21:02 And maybe just the best example of that is last week the largest ever exploit of a crypto company was disclosed. You know, $6.3 billion of a hack of a crypto exchange. 6.3 billion. And Ethereum prices are basically flat. It was at 2330 before this was disclosed and Ethereum's at 20 currently at 2288. I mean it's basically the same level when in 2025 the buy bit hack was announced and again it was a nation state actor that exploited a crypto exchange and there was $1.5 billion drained.

21:44 Ethereum fell 20% within five days and you know it's been more than five days since the exploit. So to me I think it's more indicative of where we are in the cycle that we're in the midst of a pretty early bull cycle that crypto doesn't even go down in pretty bad news. Tom Altcoin Daily speaks to millions of subscribers around the world and they want to know about Bitine.

22:11 you guys are very close to accumulating 5% of the Ethereum supply as was the goal. What happens next? >> Um yeah, and just to give people uh some perspective, uh we want to be, you know, we're a Ethereum treasury company. Uh we do have some moonshots as well, but we're our primary focus is having the maximum and positive greater than one exposure to Ethereum.

22:41 And that's been the case that you know and when Ethereum rises we outperform Ethereum and uh we currently own 6.06 million Ethereum ETH tokens. 5% of the supply currently would be 6.1 million ETH. So we're about 40,000 ETH away from owning um 5% of the network. Now once we get to 5% we're not in a rush to do anything and I think for now that we are going to not acquire more than 5% of Ethereum.

23:15 Uh partly that was a request from the Ethereum founders Justin Drake and Vitalik both at this time don't want to have excess concentration of ETH held by a single entity but we're in a good position anyways because you know we're generating almost 3% return on our ETH that is staked. That's more than $400 million a year in profits. uh which means we're in a very good position uh to to create a lot of shareholder value with that.

23:52 I think the biggest priority for instance will be we would consider stock buybacks because every time we buy back stock we're increasing the amount of Ethereum. See we'll hold the same amount of Ethereum but if we're buying back stock then the amount of Ethereum held per share is going to keep growing. Um, we also have some moonshots, you know, where we have a lot of confidence that we're going to make money owning these.

24:18 You know, we're the largest corporate investor in Beast Industries, which is Mr. Beast, for instance. And, you know, he is the world's biggest content creator. We have an investment in Sam Olman's um project called Worldcoin through 8CO. We're the largest shareholder of um and that's publicly traded as Orbs. And we have uh other moonshot investments which I'm not sure we've disclosed um specifically, but we have several others as well.

24:50 >> Do you think you'll hit 5% this year in 2026? >> I mean, it's very likely. Uh we'll probably, you know, we'll it's early November. We'll likely hit hit it before the end of the year. Yes. >> Tom, in our final few minutes, I have some speed round questions. Um just, you know, a sentence or two or a word on each. Um, but question number one, what is the best financial advice you ever heard?

25:17 >> The best the best practical financial advice that I've heard and I'm going to share this with everyone and this is for their own personal lives. Do not borrow too much money for your investing. Which means do not use too much leverage. Okay? And I witnessed this when I was a young analyst at Solomon Brothers and there were those two huge corrections.

25:41 One in 1997, you know, the market fell 20% and Cisco fell 50% twice. It happened 1997 and then it happened in 1998. I know people that literally lost all their money. And yet remember Cisco went from $9 to five, then to 18, then to $9, and then to 80. So if someone didn't have to sell it a single time, they went from 80 cents to $80. They made 100x on basically the biggest company in America.

26:13 But a lot of people got stopped out because they use leverage. So I I would strongly urge people that only properly applied leverage, but if it's going to force you to get sold and sell positions that you need to hold, then you've got too much money borrowed. What are the what risks are you watching in the markets now? The biggest risks? >> Well, uh the single entity that has killed every bull market um is the Fed.

26:42 So, um basically if the Fed decides that we need uh a recession, the stock market's going to be in trouble. Good news is the Fed is not that hawkish. Number two, uh, is if we have a war that gets really bad. I mean, oil at $90 or 100, 120, it's, believe it or not, it's actually good for the American economy. That's why GDP is booming because America is a net exporter of energy and we energy companies are making a lot of money.

27:12 But $200 oil, it's going to kill the global economy. I'd say those are the two biggest risks. >> Final question. What do you think is the greatest trade right now that most don't see yet? >> Uh, I mean the easiest trade like I'd say like quote alpha or it'll be a high sharp ratio to me is being long Ethereum. Um, because it is the singular trade that benefits from both AI, it's a downstream AI story.

27:43 uh it, you know, with programmability really preventing a lot of exploits, but it's also the biggest story uh of Wall Street tokenizing on the blockchain. >> Tom Lee, thank you so much for joining me. Links for all your stuff down below. Final thoughts for the global altcoin daily community. >> Uh, you know, I know it feels like rocky out there, especially if you own AI stocks, but we're at the bottom.