Tom Lee: “The Crypto Winter Is OVER — The Next Super Cycle Starts NOW!”

Added: 2026-05-15

[00:00:00]I think the crypto winter is over.

[00:00:04]And now is the time to think about the next cycle. I think there are many things driving this next cycle. Uh and I think Ethereum's going to be one of the main characters of that up cycle. We are in a wartime situation. I think many of you may be bearish. Um in my other hat at Fundstrat, we're actually bullish right now on stocks.

[00:00:26]Fact, uh we called the bottom for equities more than a week ago.

[00:00:32]We think the bottom has already been put in place for equities.

[00:00:35]And the reason is stocks don't rise on They don't bottom on good news. Equity markets bottom on bad news.

[00:00:43]And we've had a lot of bad news, okay?

[00:00:45]And keep in mind, if you're skeptical and you don't think equities have bottomed, look back at the last few years. I think it's definitive in our minds that the equity markets have bottomed, but I think this is an important equity low because uh if we clear this Middle East problem and the US economy holds up through higher oil, uh I think we're going to look at a bull market that could run through 2028. So, a major, major move in equities. What if the crypto winter is already over and most investors simply haven't realized it yet? Fear is still everywhere. War headlines, recession concerns, volatility across markets. And because of that, many investors still believe the next big crash is coming. But according to Tom Lee, the market may already be moving into the next major cycle. In fact, he believes stocks have likely bottomed and Bitcoin and Ethereum could be entering the early stages of a powerful new uptrend. But this cycle may look completely different from the last one because this time, the real driver isn't just crypto hype, it's AI, semiconductors, infrastructure shortages, and a massive wave of capital flowing toward the technologies shaping the future. In this video, we break down Tom Lee's thesis on why the market keeps climbing despite fear, why crypto may be entering a new super cycle, and why the biggest winners could surprise everyone.

[00:02:06]This is Finance Unplugged.

[00:02:08]>> I think the crypto winter is over.

[00:02:12]And now is the time to think about the next cycle. I think there are many things driving this next cycle.

[00:02:19]Uh and I think Ethereum's going to be one of the main characters of that up cycle. Okay. So, first, let's start with the conversation about uh this crypto winter.

[00:02:31]And I think, you know, it's been uh you know, painful, a bear market since October.

[00:02:39]But something that is unusual is that this is the first crypto winter that's happened without a stock market bear market. So, let me explain.

[00:02:51]Ethereum is down 65% since October, uh obviously a painful decline.

[00:02:57]And I want to highlight declines of equal size or greater since 2018.

[00:03:04]>> [music] >> And there are four of them, as you can see on this chart, including one last year in 2025.

[00:03:11]But here's the thing.

[00:03:12]In 2016, that 72% decline in Ethereum happened when the equity markets fell 20% and we had an industrial recession.

[00:03:22]Um in 2019, 2018 through 2019, that's when Fed Chair Powell was raising rates at a time when the market couldn't support higher interest rates, and we had a 20% equity bear market.

[00:03:36]Of course, we know 2022 was the time the Fed uh was fighting inflation.

[00:03:41]Uh and the economy had a heart attack, and so that decline in crypto was with an equity bear market. And last year, in 2025, was the tariff wars [music] that caused a 20% decline in the stock market. So, every one of these crypto bear markets that we've gone through, these crypto winters, have occurred when the equity markets were down at least 20%.

[00:04:04]But, not this time.

[00:04:07]Instead, we've had a a decline caused, I think, by two things.

[00:04:12]Maybe the cycle is is one of the original things. But, on October 10th was a a crypto deleveraging event that triggered the first sell-off.

[00:04:23]And then this year, we had another leg down in stocks because of the Iran war build-up.

[00:04:30]And maybe it's possibly explained by the SaaS apocalypse um in AI stocks, cuz as you can see here, Bitcoin and software stocks are highly correlated.

[00:04:40]But, why am I saying this? Well, because I don't think we have a crypto winter. I think it's a mini crypto winter.

[00:04:48]And the key now is is is the has the stock market bottomed? So, let me spend a couple of minutes explain to you why I think the equity market has bottomed.

[00:04:59]First, uh you should care because every bit Bitcoin top has coincided with an equity top, and every equity market bottom has coincided with a Bitcoin bottom. So, [music] we do care about what the S&P is doing.

[00:05:14]And we are in a wartime situation.

[00:05:17]I think many of you may be bearish. Um in my other hat at Fundstrat, we're actually bullish right now on stocks. In fact, uh we called the bottom for equities more than a week ago.

[00:05:31]We think the bottom has already been put in place for equities.

[00:05:34]And the reason is stocks don't rise on They don't bottom on good news. Equity markets bottom on bad news.

[00:05:42]And we've had a lot of bad news, okay?

[00:05:44]And keep in mind, if you're skeptical and you don't think equities have bottomed, look back at the last few years.

[00:05:51]The COVID lows in March, people were bearish, but equities had bottomed. And again, at Fundstrat, we did call that low.

[00:05:59]In Nov- November 2022 at the market lows, >> [music] >> we were lambasted for turning bullish and staying bullish, but that was the lows and people were bearish for the next 18 months even as stocks went up.

[00:06:12]And last year at the April lows, again at Fundstrat, we [clears throat] called the lows actually to the day, and investors were very bearish at those lows.

[00:06:21]Okay. So, why do we think the stock market's bottomed?

[00:06:25]One, uh that's what history shows. If you look at every major conflict, the stock market basically sells off into the build-up, and it bottoms when the invasion starts.

[00:06:37]In fact, let's look at World War II. In World War II, okay, that was a four-year war, the the US entered the war in December 1941, and the stock market bottomed five months into the war.

[00:06:51]To understand what that means, you should look at this chart.

[00:06:57]Okay, you can see the chart. Um the stock market bottomed in May 1942.

[00:07:04]That was one month before the Battle of Midway, which is the Pacific War.

[00:07:09]So, before the US even engaged in its first battle in World War II, the equity markets bottomed.

[00:07:16]And then you can see D-Day in Europe, June 1944, the stock market had already recovered, but it actually rallied the day of the invasion.

[00:07:26]Now, why is that? It's because during the war, the US economy gets stimulated. The average [clears throat] war spends $32 billion a month.

[00:07:37]And the last two wars cost about a trillion dollars, but that was a trillion dollars of earnings growth.

[00:07:44]And President Trump is asking for roughly 700 billion dollars additional spending for this war.

[00:07:51]So, you might say, "Well, Tom, I'm not convinced cuz look at what happened to oil." Well, oil surged from 68 to 120, but notice it's actually declined to under $100 now.

[00:08:05]In fact, uh if you look at the oil future prices, uh they barely budged.

[00:08:12]And the VIX, which is a measure of volatility, soared to 30 and is now below 20.

[00:08:19]Why does that matter?

[00:08:21]Well, we looked at three conditions.

[00:08:24]When has the VIX closed above 30, oil's pulled back 20%, and the VIX closed below 20. It's happened four times.

[00:08:32]Four of four times, it was a major low.

[00:08:35]And actually, the average 6-month gain is almost 10%. So, I think it's definitive in our minds that the equity markets have bottomed, but I think this is an important equity low because uh if we clear this Middle East problem and the US economy holds up through higher oil, uh I think we're going to look at a bull market that could run through 2028. So, a major major move in equities. The key takeaway from Tom Lee's perspective is that markets are no longer being driven by yesterday's economy. They're being driven by the infrastructure of the future, artificial intelligence, chips, power generation, compute capacity, and eventually, crypto itself. Lee argues that the crypto winter is likely over.

[00:09:20]Not because fear disappeared, but because markets bottom when conditions still look bad. He points out that previous crypto bear markets happened alongside major equity crashes. This time was different. Stocks held up much better, and according to him, that changes the structure of the cycle entirely. At the same time, he believes the current AI boom is creating a massive investment wave built around scarcity. Scarcity of semiconductors, scarcity of power, scarcity of compute infrastructure. And when demand massively exceeds supply, pricing power explodes. That's why capital continues flowing into these sectors despite fears of bubbles. Because from his perspective, this may still be the early innings. Lee also believes crypto will eventually benefit from this broader shift, especially Bitcoin and Ethereum, assets tied directly to the infrastructure of a digital economy. Of course, volatility will continue, corrections will happen, and uncertainty will remain part of the process. But the bigger risk may not be short-term volatility. It may be underestimating how powerful this transition could become over the next several years.

[00:10:31]Because in markets like this, the biggest opportunities appear when the future still feels difficult to believe.

[00:10:37]If you want clear rational breakdowns of Bitcoin cycles, macro trends, AI trends, and the future of investing without hyper panic, subscribe for daily finance videos. Thanks for watching Finance Unplugged.