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Author: MarioNawfal, compiled by: Aki
This interview with Fundstrat co-founder Tom Lee focused on topics such as “whether the cycle changes” in the crypto market, the role of macro liquidity and new narratives, the reshaping of stablecoins on US bonds and settlement systems, Ethereum’s fundamentals and valuation logic, and DAT treasury companies.Tom Lee believes that Bitcoin and Ethereum are moving from a retail-based pricing framework to a structure dominated by institutions and sovereign funds, and the traditional “four-year cycle” may be weakened as a result; if stablecoins grow into assets of about US$4 trillion, they will support US Treasury bond demand in the long term, while the Ethereum ecosystem has the advantages of native returns, compliance, governance influence and “growth of crypto assets per share”.
Why did you leave JPMorgan Chase and the early resistance
Mario: My first question is: How do you describe the industry when you first came into contact with cryptocurrencies?And how has it changed today?How is the entire industry different now?What is the pattern of Bitcoin and other tokens?
Tom Lee: I started writing crypto-related content in 2017 and publicly advocated Bitcoin (and Ethereum).At that time, we suggested that customers’ configurations were: either only hold 1%–2% of Bitcoin, or each of them was 1% of Bitcoin and Ethereum.In our opinion, the core argument for 2017 is that Bitcoin will be regarded as “digital gold.”
At that time, we had a very intuitive explanation framework: about 97% of the price of Bitcoin could be explained by the number of wallets and on-chain activities; and Wall Street’s adoption path will revolve around the narrative of “digital gold”.In the following period, institutional investors were long-term skeptical about crypto assets, and the situation only improved significantly until recently.You also know that, especially in the U.S., regulators and policy makers have been quite unfriendly to bitcoin and crypto assets, and it wasn’t until this year’s turnaround.So I would say that although it was only a few years, it felt like it had been through thirty years.
Wahid Chamas: I have a very clear impression.I was also a portfolio manager for Janus at that time and had just left to start my own private equity firm.That was the period when some strategists left large banks and started their own businesses.I remember you left JPMorgan Chase at that time.When you were at JPMorgan, you always made very bold judgments at the forefront, never getting stuck in the middle, and you are not afraid to go against consensus.
Especially in 2017, you made an extremely bold and innovative “white paper-like” conclusion.I was wondering at the time: Does he have to leave JPMorgan to write such a bold study?My colleagues generally do not accept this view, and I think many people on Wall Street do not accept it.Everyone is thinking: He has left his job and started a business. If he wants to maintain his presence, he has to choose a “very biased” topic.But that’s not the case.So what I want to ask is: Do you have to leave JPMorgan to have that freedom of thinking to see these trends?
Tom Lee: In fact, when I was the chief strategist at JPMorgan Chase, we had discussed Bitcoin many times internally when we were doing regular macro meetings, and I remember this very clearly.At that time, our Forex strategist mentioned that Bitcoin may be recognized as a digital currency in the future; but the problem is that it is mainly used by drug dealers and the dark web.Therefore, in the eyes of many people, it is just an “experiment” and its purpose is “improper”.
However, people often overlook that many innovations in history were initially used by gray industries or marginal groups.In such an institution, it is extremely difficult to form and publicly express your views on Bitcoin, and companies like JPMorgan Chase are unlikely to allow someone to publish such white papers.But we did publish our first Bitcoin white paper in 2014.At that time, the price of Bitcoin was less than $1,000.The judgment we gave at the time was that by 2022 (that is, five years later), the reasonable value range of Bitcoin is about $22,000–66,000; if it is a multi-model “triangulate”, it is roughly around $25,000.
But this cost us a business: some customers cancelled their services with us.Some well-known hedge funds even bluntly criticized us for being “too bad and losing credibility” because we are discussing the so-called “Internet currency” as a serious asset class.This really hurts us.It wasn’t until around 2021 that the research line we’ve continued to invest in began to transform into the company’s actual positive benefits.
The formation of the concept of four-year cycle and whether it will still take effect today
Mario: Speaking of the present, please explain a concept that many outsiders do not understand:“Four-year cycle”.All markets seem to follow a four-year cycle.How did this concept of “four-year cycle” come into being?Is it still valid today?
Tom Lee: When people discuss the “four-year cycle” of the crypto market, there is a certain reflexivity.The initial starting point was that Bitcoin has a supply rhythm of “halving”, so the price cycle is considered to follow the rhythm of halving.However, in a decentralized system without a central company, the lack of a unified source of information, and the price itself became particularly important in the early stages.Many people begin to look for rules based on price patterns, and the market will also trade based on these rules.
In fact, the same is true in traditional markets such as stocks— —Our institutional customers still pay extensive attention to “seasonality”, that is, applying the calendar effect to price behavior, whether in the credit market, volatility or stocks.
As for whether the “four-year cycle” is still valid, many senior people in the industry are questioning.The key is that the incremental buyers of Bitcoin are no longer mainly from retail investors — — —This is almost the main narrative from its birth to 2024.In the past two years, institutional allocation has begun to enter crypto assets.Therefore, the market may show changes that weaken or break the existing four-year rhythm or even have countercyclical characteristics.
Mario: Similar views appeared in the last round of market. At that time, many people shouted “super cycle”, but the facts proved that they did not hold true.May I ask, what indicators should be paid attention to this year to judge whether the “four-year cycle” will continue to work?
Tom Lee: Sean Farrell, our crypto strategist, is still tracking the “four-year cycle.”As far as the end of this year is concerned, this may not be critical — —— In any case, the market should have performed strongly at this stage.The real test lies in next year, and there are two main points:
1. Will Bitcoin enter a downward phase according to the price cycle?
2. Will Bitcoin be decoupled from the stock market?
I think both situations can happen, so we will also reduce the emphasis on fixed “cycles”.After all, Bitcoin and the stock market have historically been quite highly linked.
Mario: If the “four-year cycle” continues to be established, referring to past experience, we should see the beginning of the bear market and a considerable drawdown by the end of this year.If the “four-year cycle” really appears, how may this round of withdrawal be different from the past when institutional funds have actually entered the market?
Tom Lee: It should be noted that we are just doing theoretical discussions at this moment, and I do not clearly predict that there will be a drawdown or a “crypto winter”.Historically, the crypto winter hit Bitcoin very painfully: it is not uncommon to pull back more than 70% from peak, sometimes close to 90%; altcoins tend to perform worse.
I think it is not only institutions that buy Bitcoin at the moment, but also sovereign purchases.The US government has not fully explained its strategy to establish a “strategic reserve of Bitcoin”.But it can be compared to oil: when oil prices are lower, the United States will supplement its strategic oil reserves (SPRs, Strategic Petroleum Reserve) at lower prices, thereby providing bottom support for oil prices.If Bitcoin enters a cold winter and the United States adopts a “budget-neutral” buying strategy, then active buying will occur in the low-price range.As long as there is a stable buyer at the low level, the downside space will be restricted.
Mario: Maybe we can cut from the macro level – especially about Powell’s “concession to some extent” under Trump’s pressure.
Wahid Chamas: I will first build a relatively empty analysis framework and then respond to the points mentioned by Mario.In this industry, Mario manages a large digital asset portfolio—and inevitably tends to be bullish.But I want to build a more empty perspective and see how you will look at the next cycle.Your judgment has been very accurate over the years; however, those who sing the opposite tune will say that you can dismantle all of this into “high water rise”: abundant liquidity and relatively low interest rates in the long-term historical cycle.The same is true when looking back — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
Then the interest rate hike entered, and the first round of “encrypted winter” emerged.Then we experienced a new round of interest rate cuts and easing.The latest round of “crypto winter” happened almost simultaneously with Powell’s strong confrontation with inflation.In other words, the opposing side would believe that crypto assets are essentially only “high β of risky assets”, and their performance can be explained by loose liquidity and QE.
Now we are observing that global interest rates have begun to decline, and the United States is also expected to enter a rate cut, while (Feder) balance sheet is expected to stabilize.The question is: Is it that simple?Does the cycle of the crypto market mainly depend on liquidity and interest rates?Have we complicated the problem?
Tom Lee: First of all, I’ve seen charts that compare “global synchronous central bank liquidity” with Bitcoin prices, including the “about 16 months ahead” relationship proposed by Raoul Pal, which is indeed quite close to reality in explaining the crypto market.So it makes sense intuitively and logically why global liquidity can drive crypto assets to perform well.But I think the crypto market is forming the second narrative main line.In the past, a single narrative was more like: it was “digital gold”, or a carrier of trust and risk appetite, and 24/7 continuous transactions — — so people use these frameworks to understand Bitcoin.
Now, this narrative is changing, one of the reasons is institutional support plus government support.One reference can be borrowed: See what happens with venture capital (VC) and private equity (PE).In the past, the cycles of VC/PE were relatively predictable because the main participants were family offices, with a short buying and selling pace and limited fundraising scale; once the field was institutionalized, the cycles of VC and PE were completely transformed.Since the influx of institutional funds, PE has almost no longer shown the traditional “cyclicality” and now the size of PE has exceeded that of “spot stocks”.
AI New Narratives of Innovation Finance and Global Debt
Tom Lee: The second narrative is related to AI, and is adjacent to a wave of innovation that advances in technology-financiality.These two huge narratives are taking shape.The significance of AI is: It has created it on a large scale for the first time“Worker Equivalent”,meanLabor growth no longer depends on population structure.At the same time, the financial industry has also received the green light of “reimagining itself”.As we all know, the biggest cost in the financial industry is labor costs (salary); while robots do not require bonuses.
A large part of this improvement will be truly implemented, especially because we need identity authentication and the migration of trust onto the blockchain.This is why I think: Although we should still respect the impact of cycles and central bank liquidity on the market, the crypto industry is now breaking through to more practical application scenarios.
Wahid Chamas: The demographic structure you often talk about and the analysis of millennials — —I remember you emphasized at the time that user adoption: the more adopters, the stronger the scale effect of Bitcoin, which in turn gives rise to more usage scenarios.Similarly, Ethereum has gradually become a financial infrastructure.These together with the interest rate cycle constitute long-term logic.I want to talk about something you hardly have said publicly: about $600 trillion in debt and gaps around the world.Most people only look at sovereign debts, but if the debts of the resident sector, enterprise sector and the unrequited pension liabilities are added together (can be roughly divided into sovereign/resident/enterprise and pension three yuan), the total amount is about 600 trillion US dollars.This volume is as sensitive as nitroglycerin.One view is that it is a strong deflationary force in the context of population aging; another view is that the solution can only beHyperinflation.So, put aside the two main lines of “innovation” and “liquidity”, how should this matter be solved in the next five years?First of all, do you think it’s really a problem?Secondly, what role does crypto assets play in it?
Tom Lee: This is indeed a big problem.From a micro perspective, debt will kill companies.Take Meta (Meta Platforms) as an example — — — — Even if it is one of the best companies in the world, if the debt-to-income ratio on the balance sheet reaches 300% or 500%, the company’s operations will become extremely difficult: the CFO will be restrained by debt and have to make suboptimal decisions; at this time, models such as capital asset pricing and cost of capital are almost invalid, and excessive debt will squeeze the space required for the company to operate efficiently.
From the perspective of macro logic, there should also be a critical point: when the debts of countries, economies and governments are too high, they will also be “strangled”.We know the tipping point exists, but are not sure if it falls within our investment horizon (like the next 12 months).
And there are two points in my mind that are always hovering.First, AI is extremely transformative and we can imagine many scenarios.I’ll give“Friendly (good) AI scenario”A roughly 80% probability — —In this scenario, AI will alleviate many structural challenges (such as inequality).Imagine that if robots can produce agricultural production around the clock (24/7), the hunger problem will be greatly alleviated; if they can build their own residences, then “living” will be solved, which are huge positive results.
Second, it is about“UBI”(National Basic Income).I want to introduce a “look a little abrupt” view: encryption has already given “samples” of UBI – Bitcoin, Ethereum, etc. are examples.Some people buy them early and then get enough resources to make ends meet (or even luxury) in passive gains; there is no additional labor except to believe and participate in the community.In this sense, encryption is a UBI implementation path.It certainly didn’t cover everyone, but everyone had the opportunity.In the future, new crypto projects may emerge to further implement UBI in different forms.So, in a nutshell: Bitcoin and Ethereum have already acted as our UBI in a sense.
Mario: Go back to the question just now: Do you think AI can ultimately solve the debt problems we are facing now?
Tom Lee: It’s OK in a sense.It is not necessary to deny existing legal contracts, but we have seen in some “micro-micro-smographic” how debt problems can be resolved — — — — — — — — — — — — — — — — — — — — — —As we all know, stablecoins supported by fiat currency reserves form a “closed loop” in issuance (because they anchor the US dollar); and the stablecoin issuer will use the corresponding reserve or pledged assets to purchase US Treasury bonds, thus becoming the buyer of US Treasury bonds.
In other words, stablecoins are providing a more durable financial stabilizer.Japan is currently the largest overseas holder of U.S. debt, with about $1.2 trillion.Starting from this base, there is no need for too much order of magnitude growth, and the US debt holdings of the stable currency system may exceed that of Japan.
Tom Lee: Also, it should be noted that if the central bank issues digital currency, imagine that the Federal Reserve (Fed) launches a strict CBDC so that every American has an account on the Fed.To implement monetary easing, the policy tool may no longer be interest rates, but instead directly put dollars into your account (similar to “spread money by helicopters”).
If tightening is required, the central bank can pay interest on the account or recover funds.Under this framework, the yield curve may no longer exist; in a sense, long-term debt is more like a theoretical structure, because there may not be an independent market-oriented curve on the long term.
Tom Lee: Or enterprises take over some of the government’s functions — —This may also become a solution.You may be more familiar with this.I want to use the balance sheet idea to illustrate — —The United States is perhaps the least country in the world that wants a liquidity crisis.If the assets such as natural resources, real estate and intellectual property owned by the United States are included in the asset party, they can largely cover the burden of national debt.From this “balance sheet perspective”, the United States is more likely to deal with debt problems through assetization or asset-backed paths.
Why ETH’s performance in this round is relatively behind and how to win on the stablecoin track
Tom Lee: I think ETH has been relatively behind in the past five years, mainly because of a major transformation.Today’s ETH is very different from 2017: the network has completed the migration of Proof of Stake and implemented many protocol changes led or guided by the Ethereum Foundation.These changes may not necessarily benefit ETH’s token economics.But I think the situation has improved significantly since this year — — Several issues within Ethereum have been corrected, including the optimization of inflation rate and net issuance, and the circulation selling pressure has been significantly alleviated.
Secondly, two trends are helping ETH:
1. The rapid popularity of stablecoins has attracted the attention of Wall Street and the US administration; the United States has signed the GENIUS Act, and the “Project Crypto” launched by the SEC is promoting traditional finance (such as Wall Street) to begin building on blockchain.
2. In the context of accelerated development of LLM and Agentic AI (especially physical robots), the complexity of AI will be significantly improved.Training will not only come from online content such as the Internet /Tinder/Facebook, but will also penetrate into the real world’s vision and interaction, with the amount of information increasing exponentially, while also making the verification and security of instruction sources more challenging; this is the scenario where blockchain and zero-knowledge proof (ZKP) play a role.
Overall, the Ethereum smart contract platform, known for its reliability and zero downtime, should benefit from the above trends.Of course, capacity expansion still needs to be continuously promoted in order to achieve higher-level availability.
I have been involved in the crypto industry for a long time and have an intuitive feeling: the crypto community once “turns around and leaves Ethereum” in its mentality, because many people think that “the faster the better”, so Solana and Sui are sought after; especially in the meme coin craze, those public chains seem to have a more advantage in the token economy.But if the next wave is driven by Wall Street, the appeal will be different: Wall Street wants 100% uptime, which is insensitive to speed — — —Because it can be expanded on Layer 2; instead, they regard pledge as an advantage, because this will make the “power law” effective.For example, if Goldman Sachs pledged enough ETH, it will have a stronger positive voice in the governance and upgrade path of Ethereum.
Last week I was at SALT (Wyoming) and talked with many OGs that I’m familiar with.I asked them: The price of ETH has been almost horizontal in the past five years, which is true; but technically, is ETH lagging behind?Or is it just that the price performance is not good so everyone is “not too lazy to care”?They almost unanimously answered: The main reason is that the price is not performing well relative to Bitcoin, so they are “invisible”.So, I think this year and the recent changes are a pivotal moment for ETH, which is reuniting the community.If prices stand firm at record highs, such as breaking through and stabilizing above 4,800, ETH may usher in a larger cycle.
According to the data I collected, the United States accounts for about 27% of global GDP; the US dollar accounts for about 55% of the foreign exchange reserves of central banks in various countries; and in the denomination/trading pairs of financial transactions, the participation on the US dollar side is about 80% (such as crude oil is more denominated in US dollars and many stock prices are marked in US dollars).
In stablecoins and crypto trading, the trading pairs denominated in USD are almost dominant—— accounting for nearly 99%, and almost everything in the crypto market is denominated in USD.So when talking about “the stablecoins of the future”, the essence is: the US dollar will become the preferred stablecoin form.The reason is very intuitive — — —We are used to denominating in US dollars and settled in US dollars: whether it is a merchant in India, Turkey, or in Dubai, some people even use USDT to buy a house.
If the US dollar will become the denomination end of future stablecoins, the existing market share may be reshuffled.Because you also know that about 80% of stablecoin transactions occur outside the United States, and are mainly Tether, which is common on multiple public chains such as Tron.I think the US government wants to have a say in this “stablecoin future”, so it is more likely to focus on “a compliant public chain that allows the US dollar stablecoin to operate.”
If the judgment of US Treasury Secretary Scott Bessent is true — — Stablecoins are a $4 trillion market — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —Literally, the United States has almost no longer had to worry about Treasury financing, and that’s exactly what they expect.
Wahid Chamas: But I offer a slightly different perspective.You just mentioned GDP, but foreign exchange reserves are falling.The reason is that about 43% of countries and regions around the world are under sanctions, and geopolitics has caused concerns about the hegemony of the US dollar and its weaponization.Ironically, countries are adopting crypto assets and establishing (new) reserves on gold and crypto.And in the crypto space, they still hope that the US dollar will account for 99%.In a sense, stablecoins provide the world with an “immune needle” to protect them from what some people call the abuse or weaponization of the dollar hegemony; as long as the stablecoins anchor the dollar, they can complete the transfer “both both want and want”.You will see the trend rising and falling: official reserves are falling, while stablecoins are rising.
Tom Lee: Yes, Tether’s transaction wear is currently the lowest, such as USDT (Tron) can still operate freely; we can also cross-chain and exchange it for other compliant stablecoins.I don’t think ETH is the only chain that can carry stablecoins, but it is still the largest; and according to the power law effect, the ETH premium should be mainly reflected in the price of the ETH token, rather than the stablecoin itself.And in terms of games, such as Mythical (Games), they have signed many mainstream partners and are also extremely influential in the real world (non-pure encryption context)—such as the NFL, (World Football Organization), and Pudgy Penguins.Because games are very popular among young people and are no longer just male participation; there are more and more female players, and their social attributes are very strong.We see many application scenarios for encryption × games.
What exactly is the DAT digital asset treasury?
Tom Lee: The simplest way is that digital asset treasury is an equity exposure.For example, if you have an account with Robinhood or Charles Schwab, you can buy stocks of a listed company that incorporates crypto tokens into the company’s treasury.In other words, Michael Saylor is a classic example: When you buy MicroStrategy (MSTR) stocks, it is essentially equivalent to buying Bitcoin exposure because they continue to use the surplus funds to buy Bitcoin.
Many people will ask: Since you can buy Bitcoin ETFs directly, why do you still need to hold MicroStrategy?
There are two main answers:
In the world of institutional stock investment, fund managers usually don’t buy Bitcoin ETFs when they want to outperform the benchmark / look for alpha; their way of obtaining Bitcoin exposure is often to buy stocks of infrastructure companies, and the easiest thing is MicroStrategy.Therefore, by coin holding, MicroStrategy is actually larger than any Bitcoin ETF (it may also be second only to BlackRock’s products, but is basically at the forefront).
A properly operated crypto treasury can make your crypto positions grow faster — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —�The holding of ETFs will not actively grow; MicroStrategy calls this “levered Bitcoin”.Let’s give their example: Since the launch of crypto treasury in August 2020, MSTR’s “bitcoin value per share” was about $1 (the stock price was about $13 at the time); by July 2025, this value increased to about $227, achieving a hundreds of times increase.During the same period, the price of Bitcoin rose from about 11,000 to 18,000, an increase of 11 times, while the share price of MSTR rose from $13 to nearly $400, an increase of more than 30 times.
Only a part of the increase can be explained by the price increase of Bitcoin itself; the rest comes from the amplification effect of the treasury strategy——calculated by caliber, the implicit gain on the stock price is quite considerable.In fact, a well-functioning crypto treasury often corresponds to high-performing stocks.Michael Saylor just released a picture: MSTR has outperformed all the components of the “Magnificent 7” since 2020, and even outperformed Nvidia during that time.
Judging from my 35 years of experience on Wall Street, diligence, knowledge and intelligence account for about 2% of the results, and luck accounts for 98%.We do a lot of research every day, but the market is not controlled by me.
As for “crypto treasury” (taking Ethereum as an example), there are several reasons why it is unique:
First, Ethereum has profits (staking income).Some people would say that ETFs can also get the same benefits — — — — .ETFs have liquidity and redemption constraints; even if the regulatory authorities release pledges in the future, it will be difficult for the pledge ratio of ETFs to exceed 50%, otherwise it will affect the redemption compliance.
Second, Ethereum is a PoS public chain, which will trigger the power law effect.If an Ethereum treasury is large enough, it will form positive externalities to the Ethereum ecosystem: for example (assuming) Bitmine aims to get a 5% network share, then it can sow DeFi liquidity, provide market making/liquidity, or act as a staking partner when it is launched on Wall Street, playing a role in more underlying Ethereum “rails”.In a sense, crypto treasury is more like a digital infrastructure because the way it interacts with the ecology determines its systemic role.
Third, although the Bitcoin world has not yet appeared, on Ethereum, if a “crypto treasury stock” falls below the net value (NAV), there will be a motivation to do horizontal mergers and acquisitions; conversely, some treasurys may sell some ETH to repurchase stocks to repair secondary market pricing.
Fourth, the first principle is to maintain an extremely clean balance sheet and avoid volatility amplification or being “strangled” by debts.Therefore, Bitmine chooses to use only common stock financing and not issue convertible bonds — ——because convertible bonds are essentially debt-like, which will amplify leverage and risks.
Summary: Why is the digital asset treasury DAT better than token ETF — —The core lies in the returns, especially the native returns brought by ETH staking.In addition, as the “head” in liquidity and trading speed, it will also bring a premium to the relative net asset value (NAV).This means that for every 1 ETH held on the balance sheet, the stock price side can often reflect a premium effect of about more than twice.This gives it the ability to continue to expand the ETH position in the treasury and obtain higher returns for shareholders.So what happens when the cycle reverses?When ETH is up, it will naturally be smoother and smoother, which is Michael Saylor’s path; but a few years ago, Saylor was also on the brink of high-risk due to margin additions.Therefore, a risk control principle is “try not to be liable for debt.”So is there a situation: even if there is almost no debt, it is not enough, once the market draws back deeply, the model change will be transformed into risks and shareholder burdens?
Risk Management and “Velocity (ETH per share growth rate)
Tom Lee: Common stocks are essentially equity instruments, and falling prices will not trigger additional margins.When Bitmine announced its treasury strategy on June 30, the liabilities from historical entities were only $1 million; as of today, the company only has this $1 million debt on its books.That is to say, basically no debt, which keeps the incentives of the capital structure consistent — —If you introduce convertible bonds/preferred stocks/debts, conflicting incentives will be generated; and when all are common stocks, everyone is unanimously concerned about the performance of the stock price.In this model, the execution of the crypto treasury depends on what I call “speed” — — — — — — — — the amount of ETH corresponding to each share can grow rapidly.On July 8, the ETH corresponding to each share was worth about $4 when the first transaction ($250 million PIPE) was delivered.By July 27, the corresponding ETH holdings per share had a value of USD 22.84.The “speed of ETH per share” will determine your risk-return differences from other paths (such as convertible bond financing), which is also a unique feature of Bitmine.The mainstream practice in the past was to issue convertible bonds and sell forward premiums, and raise funds at lower capital costs and faster speeds; (although the additional issuance is also very fast), it is basically MicroStrategy’s big path.But to be honest, this method has lower leverage and a “speed premium” compared to issuing convertible bonds, and the liquidity premium brought by ultra-high liquidity has formed a unique competitiveness.
Therefore, our first principle is still: maintain a clean balance sheet — —This is not only the best choice, but also the reason why we have gained market recognition for our high liquidity.Investors see us as very “pure” subjects: no need to worry about convertible bonds suppressing volatility, or someone swallowing liquidity on option contracts.Bitmine’s option chain is also active, and we also hope that investors can take advantage of volatility.
Of course, conditions may change in the future.If there is a downward or misalignment, ETH can indeed consider cooperating with structured tools because of its own pledge income: with native returns, it is easier to cover fixed financing costs.But for now, this is only in our future plans; avoiding leverage is always wise.We have studied MicroStrategy’s operating manual in detail — —The timing and tools of each financing.I always return to this point: as long as we maintain liquidity, we should try to use common stock financing; as long as there is a good premium and institutional investors are willing to buy in large quantities, this path is the most suitable.
What does it mean to enter a traditional enterprise?
Tom Lee: First of all, if they all buy ETH, that’s a good thing — —The ETH price will rise more.I think the stock market is very smart and will “price stratify” itself.As you can see, the market is already distinguishing the liquidity of different treasury stocks, which is why some targets have only traded at net value (NAV).And you know, once you only trade on NAV, it’s bad because you have to appeal to more risky tools (such as debt or convertible bonds) to boost your holdings per share, otherwise you can only dilute all shareholders.
However, in terms of the growth rate of currency holdings per share, the market pricing has not yet been fully reflected, but I think it will appear soon.These “new companies” will not improve the velocity of leading companies.MicroStrategy is still the king of “speed”—they continue to expand their Bitcoin positions, which is why they can still get high premiums.Meta Planet can also be used as an example.
Ultimately, it’s much like the oil industry: investors price on “reserves”, and companies that can continue to grow their reserves will get higher valuation multiples.Looking back at Exxon and Chevron, they traded at a premium over reserves for a long time; Exxon was long the largest weight component of the S&P 500 from 1995–2018, almost the entire generation of investors, and never priced on “profitable”.I think these “DAT model” companies are more like asset-based businesses like MLP (main-limited partnership) and E&P (oil and gas exploration and mining); in contrast, the market is more willing to pay a premium for companies with strong execution and continuous “reservation increase”.
Will Ethereum have a 50% chance of surpassing Bitcoin in the future?
Tom Lee: I’m still very much interested in Bitcoin.From now until the end of the year, I think $200,000 is still possible; the longer-term goal is $1 million.As for Ethereum, I think there is more room for upside.This is also one of the reasons why we call it the largest macro transaction in the next 10-15 years: Wall Street’s on-chain construction and AI will form a superposition increase of two major fund groups.
Don’t forget that the financial system accounts for half of the economy; and in the stock market, the valuation of the financial sector is significantly lower than that of the technology sector.Therefore, in such a world, there is room for revaluation in the financial sector, and Ethereum will be the beneficiary of network value.As for the end of the year, if Bitcoin still has about 2 times upside space from its current position, Ethereum’s upside space should be greater than 2 times.In the longer term, from a five-year perspective, the reasonable valuation of ETH is about US$60,000 per coin, and the upward space in the next five years is considerable.I think the probability that Ethereum’s network value exceeds Bitcoin is at least 50%
What can RWA and tokenization bring to us?
Tom Lee: My friends in the real estate industry believe that putting RWAs such as real estate will release a lot of value: from identity and property certification, transaction process, to price records and tracking, all links will be more efficient; thus bringing higher liquidity, which often means higher pricing in price discovery.At the same time, it may also alleviate the structural imbalance in the current real estate market.Therefore, this matter is of great significance.
Furthermore, when society really sees the benefits of tokenization, it has a high probability of reducing friction.I think that no matter how the future of encryption develops, we should seriously think about “wealth and inequality” — — — — — — — — — — — — — — — — — — — — — — — — —In my opinion, crypto is exactly the opposite: anyone can buy crypto assets; this makes it more inclusive and more conducive to wealth creation.
Mario: The last question, are you still worried about the “Ethereum Killer” narrative?If not, what is the reason?Why are you more confident in Ethereum?
Tom Lee: There are indeed other public chains that are faster, and they are quite useful as well.Therefore, even if Ethereum “flips” Bitcoin in terms of network value, other public chains (such as Solana and Sui) will benefit.I think that as more things are tokenized and put on the chain, a lot of value will be created.
Mario: But do you think there will be multiple public chains coexisting in the future, or will there be only one “ultimate public chain”?
Tom Lee: It remains to be seen.Too sure that a single path is prone to breeding “tribalization”.From the perspective of the financial system, a single standard is rare — —In addition to the US dollar, it may be the most general “standard”.
