Tom Lee: The price has bottomed out, the cycle will be broken, and the next decade will focus on "tokenization"

Binance

Compiled & Edited by: Yuliya, PANews

On December 4th, at Binance Blockchain Week, renowned Wall Street analyst and BitMine Chairman Tom Lee delivered a keynote speech titled “The Crypto Supercycle Still Exists.” He pointed out that the true golden age of crypto has just begun, and not only gave a $300,000 Bitcoin and $20,000 Ethereum price target for 2026, but also detailed why Ethereum’s value is seriously underestimated and why the traditional four-year Bitcoin cycle is no longer applicable.

The Crypto Golden Age Is Not Over; Tokenization Is This Year’s Core Narrative

At the start of his speech, Tom Lee reviewed investment returns over the past decade, highlighting the astonishing growth potential of cryptocurrencies.

He noted that if you had invested in the S&P 500 in December 2016, your funds would have tripled; investing in gold might have quadrupled your return; if you were wise enough to invest in Nvidia, you’d have earned a 65x return. But if you invested in Bitcoin ten years ago, your return would be an astounding 112x. The only asset outpacing Bitcoin was Ethereum, with a ten-year return approaching 500x.

Despite lackluster crypto market price action since 2025, this year we’ve witnessed many major fundamental bullish events:

• Shifting Government Attitudes: The U.S. government has shown a pro-crypto stance, setting a new standard for the Western world.
• Strategic Bitcoin Reserves: Multiple U.S. states and the federal government have planned or implemented strategic Bitcoin reserves, a significant step forward.
• ETF Success: BlackRock’s Bitcoin ETF has become one of its top five revenue-generating products by fees, which is unprecedented for a product launched just a year and a half ago.
• Traditional Finance Entry: Long-time crypto critic JP Morgan is now launching JPM Coin on Ethereum. Tokenization has become a top priority for all mainstream financial institutions.
• Breakthrough Native Products: The crypto market has seen two or three native products that are changing traditional financial decision-making. For example, the prediction market PolyMarket provides near “crystal ball”-like information; Tether has proven itself to be one of the world’s top ten most profitable banks.

At the same time, Tom Lee believes that the core narrative of 2025 is tokenization. It all started with stablecoins—this is Ethereum’s “ChatGPT moment,” as Wall Street suddenly realized that simply tokenizing the U.S. dollar could generate huge profits. Now, financial institutions widely believe that tokenization will transform the entire financial industry, with BlackRock CEO Larry Fink even calling it “the greatest and most exciting invention since double-entry bookkeeping.”

He further pointed out that what Larry Fink calls the “beginning of the tokenization of all assets” could unlock value far beyond imagination. Tokenization offers five major advantages: fractional ownership, lower costs, 24/7 global trading, higher transparency, and theoretically better liquidity.

These are just the basics. Most people understand tokenization as simple asset splitting, but the true revolution lies in a second approach: “factorizing” the future value of businesses.

Take Tesla, for example. It can be split and tokenized in multiple dimensions:

• Time Tokenization: Purchase the net present value of Tesla’s profits in a specific year (e.g., 2036).
• Product Tokenization: Buy the future value of specific product lines (e.g., EVs, autonomous driving, Optimus robots).
• Geographical Tokenization: Purchase the future earnings from specific regions, such as the Chinese market.
• Financial Statement Tokenization: Buy tokenized portions of its subscription revenue.
• Founder Value Tokenization: You could even separate out and trade the market’s valuation of Elon Musk himself.

This approach will unleash enormous value, and BitMine is actively seeking and promoting projects in this field.

Tom Lee firmly believes the golden age of cryptocurrency is not over and that future growth potential is huge. He explained that there are currently only 4.4 million Bitcoin wallets globally holding more than $10,000. By contrast, nearly 900 million retirement accounts worldwide have more than $10,000. If all these accounts allocated to Bitcoin, it would mean a 200x increase in adoption. A Bank of America survey shows that 67% of fund managers still have zero allocation to Bitcoin. Wall Street wants to tokenize all financial products, and if you include real estate, that’s a market approaching tens of trillions of dollars. Therefore, the best days for crypto are still ahead.

( The Four-Year Bitcoin Cycle Is Broken; New Highs in January Next Year

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Despite his optimism for crypto’s long-term outlook, Tom Lee admitted the current crypto market feels like a “winter,” in sharp contrast to traditional assets: Gold is up 61% year-to-date, the S&P 500 is up nearly 20%, but Bitcoin and Ethereum have negative returns. Jeff Dorman at Arca had a great article title: “The Selloff Nobody Can Explain.”

He further pointed out that Bitcoin’s turning point occurred on October 10. Until then, Bitcoin was up 36% for the year, but has since declined. There are many market explanations: quantum computing risks, the four-year cycle theory, the historic liquidation event on October 10, AI stocks drawing attention, rumors that Strategy might sell Bitcoin, MSCI possibly excluding digital asset vault companies from indices, and Tether’s rating being downgraded, among others.

But Tom Lee believes this is closely related to deleveraging. After the FTX collapse, it took the market eight weeks to resume price discovery. From the October 10 liquidation event to now, seven and a half weeks have passed, approaching the price recovery period.

To judge the market more accurately, Tom Lee revealed that Fundstrat hired legendary market timer Tom DeMark and, following his advice, slowed Ethereum buying significantly, halving weekly purchases to 50,000. But recently, BitMine has resumed accumulation, buying nearly 100,000 ETH last week—double the prior two weeks. This week’s purchases are even higher, because they believe Ethereum’s price has already bottomed out.

Additionally, Tom Lee discussed the “four-year Bitcoin cycle” that puzzles everyone. He pointed out that, historically, it has accurately predicted the top and bottom three times, with mainstream explanations usually tied to halving cycles and monetary policy. But the Fundstrat team found that the “copper/gold ratio” and the “ISM manufacturing index” (i.e., traditional economic cycles) actually correlate even more strongly with the Bitcoin cycle.

According to Tom Lee, the copper/gold ratio (which measures industrial activity versus monetary base) and the ISM index have both historically shown a strong four-year correlation with Bitcoin’s price. However, this time, neither indicator has followed the four-year cycle. The copper/gold ratio should have peaked this year, but didn’t; the ISM index has stayed below 50 for nearly three and a half years, also without peaking.

Therefore, he believes that since the industrial cycle and copper/gold ratio cycle that drive the Bitcoin cycle have failed, there’s no reason to believe Bitcoin itself should still follow the four-year cycle. He does not believe Bitcoin has peaked, and boldly bets that Bitcoin will hit a new all-time high in January next year.

( Ethereum Is Having Its “1971 Moment”—The Core Logic Behind Serious Undervaluation

“Ethereum in 2025 is going through its own ‘1971 moment’.” Tom Lee said in his speech that just as Wall Street created countless financial products to maintain the dollar’s reserve status back then, today, facing a tokenization wave for stocks, bonds, real estate, and all assets, Ethereum has become Wall Street’s platform of choice.

Tom Lee cited early Bitcoin developer Eric Voorhees, saying “Ethereum has won the smart contract war.” He noted that nearly all mainstream financial institutions are building products on Ethereum, and the vast majority of RWA tokenization products are on Ethereum. Under the tokenization narrative, Ethereum’s utility value is rapidly increasing. Ethereum itself is also constantly upgrading, including the recent Fusaka upgrade. From a price chart perspective, Ethereum is breaking out after five years of consolidation, and the ETH/BTC ratio is also poised for a breakout.

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Additionally, as a PoS blockchain, Tom Lee believes Ethereum treasury companies are gradually changing Wall Street’s traditional roles. These companies are essentially crypto infrastructure businesses, providing network security through staking ETH, and earning staking rewards as revenue. Treasury companies also act as bridges between TradFi and DeFi, promoting integration and development. The key measure of success for these companies is their stock liquidity.

• Strategy is currently the 17th most traded stock in the US market, with daily trading volume near $4 billion, surpassing JP Morgan.
• BitMine, established only three or four months ago, has already become the 39th most traded US stock, with daily trading volume of $1.5 billion. Its trading volume has surpassed General Electric (GE), whose market cap is 30x larger, and is approaching Salesforce, whose market cap is 20x larger.

Currently, Strategy and BitMine account for 92% of total trading volume among all crypto treasury companies. Strategy’s goal is to become a “digital credit instrument,” while BitMine’s strategy is to connect Wall Street, Ethereum, and DeFi.

Based on this, Tom Lee offered the following judgments using price prediction models:

• Suppose Bitcoin reaches $250,000 in the next few months.
• If the ETH/BTC ratio returns to its 8-year average, Ethereum’s price would be $12,000.
• If it returns to the 2021 high, the price would be $22,000.
• And if Ethereum truly becomes the future financial payment rail, and the ratio reaches 0.25, then Ethereum’s price would be as high as $62,000.

Therefore, he believes Ethereum at $3,000 is seriously undervalued.

( Community Q&A

In the community Q&A session, Tom Lee discussed the decisive impact of the macro environment on crypto, Ethereum’s core value in the era of tokenization, BitMine’s role, and gave his bold price forecast for the end of 2026.

Host: Apart from price effects, how do macro factors like monetary policy or regulation really impact long-term crypto adoption and usage?

Tom Lee: Macro factors are absolutely critical. Legendary investor Stan Druckenmiller once said that 80% of an investment’s success depends on the macro. This means that even if you thoroughly research a project and judge it accurately, that only determines 20% of the outcome.

Why? Because crypto doesn’t exist in a vacuum; it’s deeply affected by the macro environment. For example:

• Regulatory risk: The most direct—one policy can determine the life or death of a project or sector.
• Monetary policy: Whether the Fed is dovish or hawkish directly affects global liquidity. When there’s more money, assets like gold and Bitcoin naturally rise more easily.
• Market sentiment: Price itself drives sentiment. The post-October 10 price drop caused sentiment to crash, with pessimism rivaling even the deep bear market of 2018.

So if you don’t understand macro, it’s almost impossible to succeed in the crypto world.

Host: There’s a common question in the community: In the future, when banks and financial institutions use Ethereum, do they really need to hold ETH? Or will they just use the tech, like we use Linux without needing to own Linux company stock?

Tom Lee: That’s a great question and gets to the heart of a key debate about Ethereum’s future. Many people do think Wall Street will just use Ethereum as a free, convenient layer-2 and won’t care about the ETH token itself.

But I think this view ignores a basic logic of the crypto world—the “fat protocol” thesis. Simply put, more value is captured at the protocol layer (like Ethereum), not at the application layer.

Let me give a simple analogy: gamers and Nvidia.

Suppose you’re a top gamer, skilled in all the hottest games. You notice all these amazing games depend on Nvidia GPUs. You have two choices:

• Spend money in-game on skins and items.
• Buy Nvidia stock and keep playing games.

The result is obvious—those who chose the latter became very wealthy, because they invested in the foundation of the whole gaming ecosystem.

Banks will view Ethereum the same way. When they tokenize trillions of dollars in assets on Ethereum, they are essentially betting their fortunes on this neutral blockchain. Their top concern is whether the foundation is 100% safe, stable, and reliable.

Historically, only Ethereum has achieved 100% stable, long-term operation as a mainstream public chain, and it keeps upgrading. So to protect their interests and have a say in network development, they’ll inevitably get deeply involved—by staking or directly holding large amounts of ETH. It’s like how multinational banks must hold dollars. If someone said, “My business settles everything in dollars, but I don’t care about the value of the dollar,” wouldn’t that sound absurd? By the same token, when everything runs on Ethereum, everyone will care about how ETH performs.

Host: If financial institutions really start adopting Ethereum at scale as a financial rail, how will Ethereum’s price change in the long run? Beyond the obvious “price will rise,” can you analyze more deeply?

Tom Lee: To predict Ethereum’s future price, I think the simplest and most effective method is to benchmark it against Bitcoin. Bitcoin is crypto’s anchor of value—if it drops, no project can stand alone.

So Ethereum’s value ultimately depends on its value ratio to Bitcoin. As Ethereum plays a more central role in financial tokenization, its network value should continually approach Bitcoin’s. If one day Ethereum’s network value matches Bitcoin’s, we’d be talking about $200,000 per ETH.

Host: Since you’re so bullish on Ethereum’s long-term value and see it as the financial foundation, what role does a company like BitMine plan to play in this grand future? What’s its long-term business goal?

Tom Lee: We firmly believe Ethereum is about to enter an unprecedented “supercycle.” Bitcoin’s success lies in becoming “digital gold,” a recognized store of value. But the story of the next decade is “Wall Street asset tokenization.”

There’s a key overlooked point in this story: liquidity. If you tokenize an asset but no one trades it, it’s a failed asset. Wall Street desperately needs partners in crypto who can provide liquidity and understand both worlds. The Ethereum community is tech-strong but weak at serving Wall Street; Wall Street is huge but lacks native crypto understanding. BitMine aims to be the bridge connecting Wall Street and Ethereum.

We not only hold large amounts of ETH, but more importantly, we use our macro vision and financial resources to build channels of communication and value between traditional finance and DeFi. As the Ethereum ecosystem grows exponentially, as deep participants and builders, we’ll reap huge rewards.

Host: You mention being a “translator” and “bridge,” and you yourself are one of Wall Street’s earliest and most steadfast crypto advocates. We’re curious: how did you first get into this space? What made you so convinced of its potential?

Tom Lee: This goes back to 2017, when I founded independent research firm Fundstrat. One day, I saw on TV that Bitcoin hit $1,000. I immediately recalled in 2013, when it was only $70, I discussed it with colleagues at JP Morgan, but mainstream opinion saw it as just a tool for black market trades.

My gut told me, nothing goes from $70 to $1,000 for no reason. So we spent an entire summer researching it. I found that, while I didn’t understand all the technical details, 97% of the price increase could be explained by “network effects”—growth in wallet addresses and activity. I instantly realized: this is a network value asset!

When I first advised clients to allocate to Bitcoin, I faced huge resistance, even lost several key hedge fund clients. They thought I was crazy to recommend something with “no intrinsic value.” That period was emotionally charged, but tough for business.

Then I remembered my early career. Before I became a strategist, I researched wireless communications. In the early ’90s, cellphones were seen as “toys for the rich,” nobody thought they’d go mainstream, and the consensus was they were just a supplement to landlines. But as a guy in his twenties, I clearly felt how much cellphones improved my social life.

That’s when I realized: Only young people truly understand new technology. Older generations always judge new things based on their already-fixed lifestyles. So we can understand crypto not because we’re so smart, but because we don’t look at it with an old-fashioned mindset—we try to think from the young generation’s perspective.

So, if you’ve been in crypto for many years, congrats—your persistence is remarkable. But be careful not to let your thinking become rigid. What really matters is what today’s twenty-somethings are doing and care about. They might care more about the social impact of a project; maybe they want to invest not in all of Tesla, but in the “Optimus robot” specifically. That’s the future full of possibilities that crypto will unlock for us.

Host: Tom, you’re famous for bold market predictions. Give us a Bitcoin and Ethereum price forecast! Let’s set the date at the end of 2026—what do you think?

Tom Lee: My core view is the four-year Bitcoin cycle will be broken. I think it will hit a new all-time high in early 2026. If so, Bitcoin’s path will look more like US equities. I predict the stock market will really take off in the second half of next year.

So my forecast is by the end of 2026, Bitcoin will be around $300,000.

And if Bitcoin can reach that level, Ethereum’s performance will be phenomenal. I think by the end of next year, Ethereum could surpass $20,000.

Host: $300,000 Bitcoin and $20,000 Ethereum! We heard it here first. Tom, we have to invite you back next year to see if your prediction comes true!

Tom Lee: If I’m wrong, I might not come back, haha.