Tom Lee Just Updated His View On Bitcoin & Ethereum - This will strike hard...

Added: 2026-05-20

[00:00:00]Crypto just suffers from the fact that gold's done so well that it's sucked away risk appetite from everything else. What we're seeing crypto today, of course, is just really a battle, a traditional battle, which is incumbents of which is Wall Street hijacking the narrative on crypto and the Clarity Act to kind of stack everything in their favor to try to quash uh the new entrants. Okay. I want to know what the black swan event is for crypto.

[00:00:27]Yeah, uh I think there's a few. As Bitcoin continued hovering around the $80,000 mark, Tom Lee finally opened up about the current state of the market, touching on the Clarity Act and what could be coming next for investors.

[00:00:39]There's a lot to unpack in this video, and some of the insights shared could be valuable for anyone holding Bitcoin or investing in the market right now. I've been writing about crypto for about 10 years now.

[00:00:52]And uh Bitcoin is down about 40% from its highs. I think it's like the seventh time it's fallen 50% from a recent or local high.

[00:01:05]Um uh three of those times that were genuine crypto winters, you know, like bear markets that led to a a 90% decline from the peak.

[00:01:15]And so, I think if anyone's been in crypto a long time, like this we're kind of used to the pain, you know, of these drawdowns.

[00:01:24]Um but there is a difference that it is, you know, crypto will diverge from its narrative because it's evolving, like it's becoming more of an institutional asset. And there's questions about quantum now.

[00:01:38]Uh and and quantum is a genuine risk to to Bitcoin in the sense that if quantum uh supremacy really becomes commercial, and maybe in China they've already figured out, you know, about a quarter of Bitcoin wallets can actually be uh that's the bounty, they can be stolen because uh you know, Satoshi hasn't upgraded his wallets.

[00:01:58]Um but I think that this is probably more of a crypto squall, not a crypto winter. Part of it was triggered from October 10th because on that date there was a a a price shock, which was the Trump proposing new tariffs on China that triggered a whole cascade of deleveraging in the crypto industry bigger than the FTX deleveraging that happened in November 2022.

[00:02:24]November 2022 basically marked the end of that bear market. And that's when things like transaction activity began to recover.

[00:02:33]Um the reason I don't think we're in a crypto winter is that things like if you look at Ethereum daily transaction activity has actually been rising parabolically because of tokenization.

[00:02:44]And you know, Wall Street is starting to build on crypto. So in some ways I think crypto just suffers from the fact that gold's done so well that it's sucked away risk appetite from everything else.

[00:02:59]You know, and there's no leverage in crypto and if and and people who want to do zero-day trading and and high-frequency trading, it it's really paid to buy gold and silver right now.

[00:03:09]Okay. I want to know what the black swan event is for crypto.

[00:03:13]Yeah, uh I think there's a few. So one is is of course uh if quantum can break encryption. So what is it what will that do? It means it would you just you won't be able to your Bitcoin will never be safe. Uh yeah, so Bitcoin itself will need to do ha- unless they can somehow push an upgrade into the old wallets, which they can't, they they'll have to fork Bitcoin to a quantum-resistant chain.

[00:03:40]But like things like Ethereum, they upgrade twice a year. So they're they can develop quantum resistance. Um I think the second risk actually to crypto is is AI. Uh in the sense that today the narrative is like AI uh or needs to to start to engage in microtransactions because like robots when they get into the wild, uh, you can't keep it in a in a walled garden, so you have to validate transactions.

[00:04:05]And of course you have to collect money.

[00:04:07]And so blockchains can sort of track all this and they all have digital wallets.

[00:04:12]Um, and and by the way, if you generate enough tax revenue from that, you don't have to employ Americans anymore because like the government tax receipts will ex- will be big enough that people don't have to work. What if AI gets so smart that they're all running their own blockchain?

[00:04:30]And so you don't need public chains because AI runs their own language of validation and so you don't need crypto because the AI, you know, as you as you know, like I know multiple is a fake, but you know how like AI is developing their own language and places to to linger.

[00:04:48]You know, if they're developing their own social language, they could always develop their own monetary system.

[00:04:53]You know, what what we're seeing crypto today of course is just really a battle, a traditional battle, which is incumbents of which is Wall Street hijacking the narrative on crypto and the Clarity Act to kind of stack everything in their favor to try to quash uh, the new entrants. But that's like an old, you know, that's the the battle we've seen in every new technology. Uh, but that's hurting public chains because Wall Street wants to sort of control the narrative. I think prediction markets are actually really useful cuz it's the closest thing to a crystal ball. So we we use it at Fundstrat, the aggregate data.

[00:05:29]And I mean, many of you may know, but you know, Polymarket in 2024, uh, we were using that to follow the election more than the Nate Silvers of the world. And Polymarket, you know, called 50 of 50 states correctly. So the prediction markets in aggregate, you know, got the got it right.

[00:05:48]But, I think for users it is a form of gambling. So, I I I think there is a social consequence. Uh prediction markets and crypto, though, are starting to really help deconstruct like what a stock is.

[00:06:04]Um so, I think it is it's it's really a big innovation for the financial industry cuz, you know, in the future, for instance, like if you're going to buy Tesla stock, you know, today you can buy Tesla stock and it's $20 a share.

[00:06:16]But, in theory, Tesla could actually be factorized. Like, you know, you can break it up into 36 or 20 different earning streams, right? Each future year, and someone, if they if it's tokenized, can just buy 20 36 earnings, and that's the price of it. So, management knows what the market's pricing for their earnings, but then it's a lottery ticket for you cuz if they beat it, it's because it's a cheap option. It you could make a lot more money than buying the whole companies. Tom Lee continued to explain that we may have already seen the bottom of this cycle, and from here the market could be entering a completely different phase.

[00:06:54]Once the Clarity Act moves forward and global tensions, including current wars, begin to settle, the market could gain the clarity it needs for the next major breakout. That surge may benefit both Bitcoin and Ethereum in a very big way.

[00:07:09]The key is staying positioned and not getting left behind while things are still developing. What may be coming next could be much larger than many people expect.

[00:07:18]As always, use the dips as opportunities to increase your exposure, whether in Bitcoin or Ethereum. The window to act may not stay open forever. So, paying attention now could make all the difference later. Patience and strategy now could make a significant difference for investors positioning themselves for the next major phase ahead. Have you ever wished you had learned about Bitcoin earlier? Make sure to teach your kids or young family about it now before it's too late.

[00:07:45]This team's ebook is perfect for that.

[00:07:48]Link in the description.