Compiled & translated by: Deep Tide TechFlow

Key points summary

Tom Lee is the co-founder and head of research at Fundstrat Global Advisors, chairman of Ethereum finance company Bitmine Immersion, and chief investment officer of Fundstrat Capital, which manages the rapidly growing Granny Shots ETF series (currently with $4.7 billion in assets).

In this episode, Tom shares his market views. He believes the decade-long bull market that began in 2022 is still in its early stages. Although this year may see a sharp market correction that feels like a bear market, the stock market is poised for a strong rebound in 2026. He points out three major changes investors need to face this year: new Federal Reserve policies, a more interventionist White House, and the still-repricing artificial intelligence (AI) hype. He also states that while he remains optimistic about the "Magnificent Seven," cyclical sectors, energy, basic materials, financials, and small-cap stocks may be more worthwhile investment areas to watch.

The program also explored topics such as gold, cryptocurrencies, and demographic trends. Tom believes gold is currently undervalued and revealed that Tether may be one of the largest private gold buyers at present. Furthermore, he pointed out that millennials are rediscovering the value of gold, while younger generations are more inclined towards cryptocurrencies. He suggested that Bitcoin remains "digital gold," while Ethereum is his most favored cryptocurrency. He also analyzed how the deleveraging event of last October caused cryptocurrencies to deviate from gold's price trajectory and predicted a significant rise in Bitcoin and Ethereum as banks and asset management companies accelerate the adoption of blockchain technology.

In addition, Tom also discussed Bitmine's $200 million investment in MrBeast's Beast Industries. He believes MrBeast is one of the most influential media assets of this generation and stated that financial education and Ethereum have the potential to be central to future products, reaching billions of users worldwide.

Summary of key viewpoints

Bitcoin is expected to reach a new high of $250,000 this year.
Tether has become the largest private buyer of gold.
The pullback may be around 10%, but even a 10% pullback would feel like a bear market.
Every market pullback presents a good buying opportunity.
This year, our most favored sectors are energy and basic raw materials.
The banking industry has begun to embrace the efficiency improvements brought about by blockchain.
Silver and copper may perform well this year. Copper, as an industrial metal, is closely correlated with the ISM index. If copper prices rise, I believe it will boost the performance of basic raw materials stocks.
When we look back at the performance in 2026, we will find that this year is a continuation of the bull market that began in 2022.
Several key shifts are occurring in the market. The first is the new leadership at the Federal Reserve; the second is the policy orientation of the White House; and the third is that the market is still trying to assess the value of artificial intelligence (AI). These three factors combined could lead to a bear market-like correction.
Last year, investors tended to overreact to escalating tariff negotiations and uncertainty. This year, the market reaction is likely to be more rational, with the magnitude of the reaction expected to be halved.
The Federal Reserve's interest rate cuts can actually alleviate the economic pressure on many Americans.
If the Federal Reserve chairman changes or there are several more interest rate cuts this year, it will be good for the stock market.
Oil prices may be weak or volatile in the short term, but factors such as the development of data centers and the shift to alternative energy sources will drive future oil price increases, thus energy stocks are likely to perform well.
Bitcoin is digital gold, but the people who believe in this theory do not overlap with those who own gold.
The adoption curve for cryptocurrencies is still higher than that for gold because there are more people who own gold than those who own cryptocurrencies.
I believe the most important advice I can give to investors is not to try to time the market; those who truly make money are the long-term investors.
Cryptocurrency is gaining acceptance among the younger generation—it has become a part of their lives.

2026 Market Outlook: A Correction in a Bull Market

Wilfred Frost: Welcome to the Master Investor podcast. I'm Wilfred Frost. Today's guest is Tom Lee, whom many of you will recognize. Tom is the co-founder and head of research at Fundstrap Global Advisors, and also the chairman of Bitmine Immersion, an Ethereum asset management company, where he manages the Granny Shots ETF (a fund focused on technology and innovation investments). It's a great honor to have you here in London for our show.

It's early 2026, Tom. I see you made a very accurate prediction about the market trend this year: a surge at the beginning of the year, followed by a significant correction, and then a new rebound at the end of the year. Does this description accurately reflect your market outlook for 2026?

Tom Lee:

I believe that when we look back at 2026, we'll see it as a continuation of the bull market that began in 2022 , while also demonstrating greater economic resilience. However, I think the market needs to face several important shifts, two of which are particularly crucial. The first is the new leadership of the Federal Reserve . Markets typically test the policies of a new Fed chair, and this process, including policy identification, confirmation, and market reaction, could trigger a correction. The second factor is the White House's policy orientation . In 2025, White House policies had a significant impact on technology consulting and healthcare, while in 2026, more industries, sectors, and even countries may become policy targets. This change brings more uncertainty, as evidenced by the recent rise in gold prices, reflecting market concerns about risk. These two factors could lead to a market correction.

Wilfred Frost: You mentioned two factors. Are there any other possible influences?

Tom Lee:

Yes, there's a third factor: the market is still trying to assess the value of artificial intelligence (AI) . While we believe AI remains a strong market driver, many questions remain regarding its long-term potential, energy demands, and data center capacity. Until these issues are clarified, the market may need other strong supporting logic, such as the recent rebound in the ISM Manufacturing Index and a potential recovery in the housing market as interest rates fall. However, these shifts also introduce uncertainty. Therefore, I believe these three factors combined could lead to a "bear market-like" correction.

Wilfred Frost: So how much do you think this pullback will be? Is it a 20% correction from the peak to the trough, or something smaller?

Tom Lee:

It might be around 10%. But even a 10% pullback would feel like a bear market. Of course, it could also reach 15% or 20% , which could bring the market back to its initial level from its strong start to the year. Although we've had a very good start to the year, I expect the market to experience a decline at some point, but I believe the final market performance for the year will be very strong.

Wilfred Frost: We talked last August, and you mentioned we were at or near the beginning of a 10-year bull market. Do you still hold that view? In other words, once the market has gone through this correction, do you see it as an excellent buying opportunity?

Tom Lee:

I've always believed that every market pullback presents a great buying opportunity. Last year, the market decline on April 7th due to tariffs proved to be one of the best times to buy stocks in the past five years. Many stocks hit new all-time highs and experienced a very strong rebound. Therefore, I believe that if the market does indeed pull back this year as we expect, it will be an excellent buying opportunity.

The driving force of a long-term bull market

Wilfred Frost: Last August you mentioned that we might be at the start of a new 10-year bull market, citing reasons such as a surge in the working-age population, a younger generation inheriting significant wealth, and the U.S.'s central role in many areas of innovation, particularly artificial intelligence and blockchain . Are you still confident in these three long-term factors?

Tom Lee:

Yes, in fact I think these factors now seem much clearer.

First, the United States does have a favorable demographic trend, which contrasts sharply with the declining working-age population in many countries.

Secondly, regarding wealth inheritance , there is a growing discussion suggesting that Generation Z, Millennials, and Alphas will inherit substantial wealth throughout their lives. While this phenomenon may exacerbate wealth inequality, it also means that some young people will become extremely wealthy, while others will gradually accumulate personal wealth through their own efforts.

Regarding artificial intelligence , I believe there is growing evidence that we are moving towards superintelligence. Progress in this area is very rapid, especially in robotics and the integration of robotics with other technologies, which will continue to drive America's advantage. As for blockchain, its impact is no longer limited to companies like BlackRock and Robinhood. For example, Jamie Dimon (CEO of JPMorgan Chase) recently stated publicly that he believes blockchain can indeed solve many problems in financial services. I think the banking industry has begun to embrace the efficiency improvements that blockchain brings.

Wilfred Frost: You remain a strong believer in a long-term bull market and think the market will recover after a pullback. So how can we better judge when this initial pullback will arrive? I recently heard you in a CNBC interview where you mentioned that the market usually peaks on good news, which sounds somewhat counterintuitive. Do we already have such good news now, suggesting that the market may have peaked in the short term?

Tom Lee:

This is a difficult question to answer, and some of the current indications are based on experience. Our institutional clients are not currently showing a very optimistic market positioning, and I believe there is still room for the stock market to rise until both public and institutional investors have adjusted to the point where good news is no longer driving the market higher. This is why the strong performance of stocks in the first week of January is a positive sign, and it looks like we may end the month with positive returns, indicating a strong start to the year.

Margin debt is an indicator we can monitor. We've been tracking margin debt on the New York Stock Exchange, and it's currently at a historical high, but the year-over-year growth rate is only 39%. Typically, for a market to reach a local peak, the year-over-year increase in margin debt needs to reach 60%. Therefore, there's still a possibility of further acceleration in leverage, which could signal a local market peak.

Macro: Trade War and the Federal Reserve

Wilfred Frost: Let's talk about some macroeconomic factors. First, let's discuss trade . I remember you mentioned last year that the impact of the trade war wasn't as bad as expected. However, just this past weekend saw more tariff-related threats, this time involving Greenland and targeting the UK and the EU. It seems the UK might compromise, while the EU might retaliate. Does this worry you in the short term?

Tom Lee:

There are concerns, but they're not particularly serious. I think last year investors tended to overreact to escalating tariff negotiations and uncertainty, leading to a significant market decline. However, this year's market reaction is likely to be more rational, with the magnitude of the reaction expected to be halved . Nevertheless, uncertainties remain, such as how the Supreme Court will rule on the tariffs. A ruling against Trump could weaken America's negotiating leverage, potentially leading the White House to take more extreme measures, which could trigger even greater uncertainty. However, I've recently read some news suggesting that the Supreme Court might support Trump's policies. Therefore, the final outcome is still uncertain.

Wilfred Frost: Another important macroeconomic issue is the Federal Reserve . When we discussed this last August, your view was that Fed rate cuts were good for the market, but questioning the Fed's independence was bad for the market. However, I feel you didn't particularly emphasize the seriousness of intervention at the time. How do you view this issue today?

Tom Lee:

I believe the situation remains similar. The Federal Reserve does face some implicit threats, including investigations by the Department of Justice. However, I think there are still voices within the White House emphasizing against completely undermining the Fed's independence . Market history tells us that the Fed remains one of the most important institutions globally, and weakening its credibility and independence could introduce enormous uncertainty.

We also know that current Federal Reserve Chairman Jerome Powell's term will end this year. So the current situation is somewhat like "letting time pass," because we know a new Fed chairman will take office. Once the new chairman is in place, I think the White House will likely be satisfied . As for the next Fed chairman, current forecasts are constantly changing; it now seems that Hasset's chances are decreasing, while WH and Rick Reer's chances are increasing. Furthermore, there is a general expectation that this year's interest rate cuts may be larger than economic data suggests.

Wilfred Frost: So, if the Fed chair changes or there are a few more rate cuts this year, will that ultimately be good for the stock market?

Tom Lee:

Yes, I think it's good for the stock market . Inflation has been a major focus since 2022, partly because the Federal Reserve has been battling inflation and trying to maintain its credibility through tightening policies. However, based on economic data, I believe the actual inflation level is lower than the published figures . For example, "real inflation" is shown at 1.8%, and the median inflation is also 1.8%. The main factor currently keeping inflation high is housing costs, but home prices are actually falling. And there's a lag in how housing costs are calculated in the Consumer Price Index (CPI). Therefore, I think the Fed has room to cut interest rates. If housing affordability becomes an issue, we need to address mortgage rates, and rate cuts can help alleviate that. Furthermore, burdens like consumer installment debt can also be reduced through rate cuts. So I think the Fed's rate cuts could actually ease the economic pressure on many Americans.

Sector Allocation: Energy, Raw Materials, and Technology

Wilfred Frost: Let's talk about how investors should allocate their portfolios by sector. Have the largest stocks, like the "MAG 7" or "MAG 10," become overvalued? Are they no longer suitable investment choices for 2026?

Tom Lee:

We remain bullish on the "MAG 7" because we are confident in their earnings growth. As long as these companies maintain their growth, they should outperform the market. However, our top picks for this year are energy and basic materials. We listed these two sectors as our top investment priorities in early December last year. This is partly due to the mean-reversion investment logic—energy and basic materials have performed very poorly over the past five years, and historically, such a significant downturn typically marks a turning point. Furthermore, current geopolitical factors also favor these two sectors.

I believe the ISM index may break through 50 again this year, and coupled with the Fed's rate cuts, this means the industrial, financial, and small-cap sectors are likely to perform well. So while we like the "MAG 7," cyclical sectors may be a more interesting investment option this year.

Wilfred Frost: Let's talk about the energy sector first. I remember you once said that you weren't optimistic about oil prices in the short term, but you were bullish on energy stocks.

Tom Lee:

That's right. I understand that oil prices and energy stocks don't always move in tandem . This is partly because energy stock prices reflect expectations of future oil prices. I believe oil prices may be weak or volatile in the short term, but factors such as the development of data centers and the shift towards alternative energy sources will drive future oil price increases, thus allowing energy stocks to perform well.

Wilfred Frost: As for the basic raw materials sector, especially the metals-related parts, their basic commodity prices have experienced an incredible surge. Perhaps we can discuss this issue in conjunction with cryptocurrencies later.

Will these stocks underperform if metal prices correct? Does your forecast rely on the stability of metal prices such as gold, silver, and copper?

Tom Lee:

Yes, if gold, silver, and copper prices experience negative growth this year, the investment logic for the basic materials sector may not hold true. However, we believe that while gold has already seen significant gains, silver and copper may perform well this year. Copper, as an industrial metal, is closely correlated with the ISM index. If copper prices rise, I believe it will boost the performance of basic materials stocks.

Wilfred Frost: The financial sector was a very bullish area for you last August, and your predictions at the time have been remarkably accurate. These stocks have performed exceptionally well; looking at their charts now, it's almost unbelievable how much they've risen. Do you still favor these stocks? Their price-to-book ratios are no longer cheap.

Tom Lee:

Yes, they are indeed not cheap anymore, but I think these companies' business models are being redefined in a positive way. Banks invest heavily in technology and artificial intelligence (AI), so they will be major beneficiaries of the era of super-intelligence. The biggest expense for banks is employee compensation, and I think in the future, banks can reduce their reliance on employees, which will improve their profit margins while reducing earnings volatility. I think banks will be revalued, more like tech companies . When I started researching banks in the 90s, they were typically valued at 1x price-to-book ratio or 10x price-to-earnings ratio, but now I think they deserve a market premium.

Wilfred Frost: I'd like to talk more about tech stocks and AI-related stocks. You're still bullish on this sector, and your predictions have been very accurate over the past 15 years. But I was a little surprised when you said that only 10% of AI stocks will be good investments over the next decade. But you're still bullish on this area, right?

Tom Lee:

Yes, I think this is a common phenomenon in any rapidly growing sector. For example, looking back at the internet industry, if we look at the stock pool from 2000, that is, 25 years ago, only 2% of the companies ultimately survived. But those 2% of companies generated returns far exceeding the losses of the other 98%, and their overall performance was still significantly better than the S&P 500. Therefore, I believe that in the AI field, although more than 90% of stocks may ultimately underperform, successful investments will compensate for or even surpass the losses of others.

Companies going public today are typically in more mature, later-stage stages, but this seems to be changing. I think this is the first time we're seeing a growing number of companies interested in going public, not just through IPOs, but also through SPACs (Special Purpose Acquisition Companies). Furthermore, in alternative investment areas like venture capital, private equity, and private lending, investors (limited partners, LPs) aren't receiving as much dividends. Therefore, money is shifting from alternative investments to the public markets, driving more companies to go public. However, I've seen many publicly traded companies perform very strongly in the past 12 months, so I think there are still plenty of opportunities in the market.

Wilfred Frost: The valuations of mega-cap companies and large-cap stocks are very interesting. In most cases, their valuations are reasonable because of their high growth rates. I heard you mention something in another podcast that really struck me: that these companies might gradually evolve into something similar to consumer goods companies , thus commanding a premium valuation. This reminds me of whether Warren Buffett noticed this earlier than we did, for example, with Apple. Is this your view on these mega-cap companies? For instance, even if Nvidia's growth rate slows, its valuation might still remain stable?

Tom Lee:

Yes, the audience can look back at the example of Apple. Since its IPO in the 1980s, Apple analysts have consistently maintained that it's a hardware company. For years, they believed Apple's valuation shouldn't exceed 10 times earnings. However, Apple gradually built a complete services ecosystem and customer retention model, proving it's more than just a hardware company. I remember meeting with some institutional investors between 2015 and 2017 who still insisted Apple was a hardware company, but today Apple's valuation has completely changed.

I think people are currently viewing Nvidia in a similar way, seeing it as a cyclical hardware company, hence the barely acceptable P/E ratio of 26. In reality, Nvidia is a company with highly predictable future earnings, yet its valuation is only half that of Costco. I believe these stocks have significant room for further valuation increases.

Wilfred Frost: If the macroeconomic outlook is worse than expected, when the market experiences the correction you predict, such as the S&P 500 potentially falling by 20%, will these stocks fall less like consumer goods companies, or will they remain high-volatility growth companies and fall more than the market?

Tom Lee:

That's a good question. During market corrections, crowded trades are usually the first to be affected (Note from Deep Tide TechFlow: Crowded trades typically refer to assets or stocks held by a large number of investors. This can make these assets more sensitive to market volatility, especially during corrections. When market sentiment turns pessimistic, investors tend to rush to reduce their holdings, exacerbating the price decline of these assets). This is because investors need to reduce risk. So, the "MAG 7," as a large holding, might be impacted, but on the other hand, when investors are nervous, they might turn to the "MAG 7." Therefore, I think non-US stocks are likely to be the larger part of the correction, as they significantly outperformed US stocks last year. If trade tensions escalate or the global economic outlook becomes uncertain, the correction in non-US stocks could be even more significant.

ETF Product: Granny Shots

Wilfred Frost: Let's talk about some of your recent successes, such as "Granny Shots," which, as I mentioned at the beginning, are your ETFs or a series of ETF products. When we discussed them last August, these ETFs had between $2 billion and $2.5 billion in assets under management, and now they've grown to $4.5 billion.

Tom Lee:

Yes, the total assets under management have reached $4.7 billion, distributed across three ETF products. The Granny GRNY is the largest. The Granny J, a small- and mid-cap ETF launched last November, currently has approximately $355 million in assets. The Granny ETF, designed for income-oriented investors—the income-generating version—paid its first dividend last December. This typically drives asset growth due to the defined yield. The target yield is approximately 10%, and this product currently has approximately $55 million in assets.

Wilfred Frost: Is now a good time to invest in small-cap stocks or income-generating products rather than traditional products for the coming year?

Tom Lee:

I'm not the kind of person who likes to try to "market time." For example, last January, Mark Newton warned of a possible correction, but the market actually fell far more than expected, reaching 20%. However, we still advised investors to remain fully invested, and they eventually recovered their losses by July.

I believe small-cap and mid-cap stocks have been underperforming for a long time, and even if there is a pullback, it won't change the fact that they may be poised for a strong five- to six-year cycle. Therefore, I will continue to hold these stocks.

Of course, if the overall market falls, the Granny ETF won't rise. Therefore, I think any investor buying these ETFs needs to be aware of this. However, these ETFs select the strongest companies related to the most important themes, so they should perform better during market corrections and likely be even stronger during market recoveries.

Gold and Cryptocurrency

Wilfred Frost: Let's talk about gold first, then cryptocurrency. What do you think are the reasons for gold's outstanding performance last year?

Tom Lee:

I believe there are some obvious reasons for gold's strong performance, as well as some less obvious ones. The obvious reasons include: First, the current investment environment is characterized by increased political and geopolitical uncertainty. Global wars, and the fact that while the US president has performed well economically, he has exacerbated uncertainty and fragmentation in global trade. Second, the widespread adoption of easing policies by central banks worldwide, including the US finally beginning its easing cycle and ending quantitative easing (QT), have all supported gold.

As for the less obvious reasons, firstly, Tether (the largest stablecoin provider in the US) has become the largest private buyer of gold. To my knowledge, each unit of Tether's stablecoin is fully collateralized with Treasury bonds, but they generate returns from these assets and use the additional returns to buy gold. I believe Tether has been one of the largest net buyers since last July.

Wilfred Frost: When you say "believe," is it based on solid data? How large is Tether's purchase volume compared to the recent large-scale gold purchases by central banks around the world?

Tom Lee:

Yes, we have indeed seen the relevant data. I can't say the exact scale, but I believe that probably only one central bank has purchased more than Tether. If you simply look at the issuance of Tether's USDT and the price of gold since last July, there is a high correlation between them.

Another factor is a study we conducted in 2018 that found investment preferences often transcend generations. For example, baby boomers favored gold, Generation X preferred hedge funds, and now millennials entering their prime working years are showing renewed interest in gold, a favorite of their grandparents. This has also contributed to the resurgence in gold demand.

Wilfred Frost: I'm a millennial, and I like gold, but I sold too early. Regarding gold, do you see it as the ultimate currency, or just a commodity like other industrial metals such as copper and silver? This would change our view of last year's returns; for example, JPMorgan Chase and Nvidia performed very well, with their stocks rising by around 20%. But if we consider gold as the ultimate currency, then they might actually be declining. What do you think?

Tom Lee:

Yes, we haven't explicitly recommended gold at Fundstrat, but I think we probably should. You're quite accurate; it doesn't make sense to consider gold as a commodity metal because last year, total industrial and retail jewelry sales of gold were approximately $120 billion, while its network value reached $30 trillion. So, the price-to-sales ratio is unreasonable. Furthermore, we know gold isn't scarce because there are vast underground resources, and all gold is extraterrestrial material; for example, SpaceX might discover a gold-bearing meteorite in the future, which could lead to a sudden and significant increase in the gold supply.

However, gold has existed as a store of value for centuries. As you said, it served as an alternative to the dollar. Therefore, we should perhaps view gold as an alternative to the dollar, from which all other assets depreciate relative to gold.

Wilfred Frost: From this perspective, do you think more people will accept this viewpoint? What would be the impact?

Tom Lee:

Yes, I think that means gold should have a place in a portfolio. I've seen people like Ray Dalio recommending up to 10% gold , and in this podcast you mentioned maybe 15%. Let's say 15%, but most people's portfolios have almost zero gold. So gold is still an underweight asset today.

Wilfred Frost: Why didn't cryptocurrencies perform as well as gold last year?

Tom Lee:

I believe the reason is related to timing . Before October 10th last year, cryptocurrencies performed similarly to gold. For example, Bitcoin rose 36% and Ethereum rose 45%, even outperforming silver. But on October 10th, the largest deleveraging event in cryptocurrency history occurred, even more significant than the FTX event in November 2022. Afterwards, Bitcoin's value fell by more than 35%, and Ethereum fell by nearly 50%.

The cryptocurrency market experienced deleveraging , which disrupted liquidity providers, who are essentially the central banks of the market. As a result, approximately half of the market's liquidity providers were eliminated in the October 10th event. This internal deleveraging event will continue to have a significant impact on the market until cryptocurrencies gain widespread support from mainstream institutional investors.

Wilfred Frost: Does this mean you admit that Bitcoin is not digital gold?

Tom Lee:

Bitcoin is digital gold, but the people who believe in this theory don't overlap with those who own gold. Therefore, the adoption curve for cryptocurrencies remains higher than that for gold because there are more people who own gold than those who own cryptocurrencies. The future adoption path for cryptocurrencies may be very winding, and I think 2026 will be a very important test. If Bitcoin can reach a new all-time high, then we can be sure that the deleveraging process is over.

Wilfred Frost: Your price target for Bitcoin this year is $250,000, right? What's driving this prediction?

Tom Lee:

Yes, we believe Bitcoin will reach new highs this year. I think the driving force is the increasing utility of cryptocurrencies. For example, banks are beginning to recognize the value of blockchain technology, and settlement and final clearing operate very efficiently on the blockchain. Furthermore, cryptocurrency banks like Tether are proving that blockchain-native banks are actually better than traditional banks. For instance, Tether is projected to earn nearly $20 billion in 2026, making it one of the top five most profitable banks globally. In terms of valuation, it could be second only to JPMorgan Chase, or even double that of Goldman Sachs or Morgan Stanley.

Tether has only 300 full-time employees, while JPMorgan Chase has 300,000. By using blockchain technology, Tether's profitability is almost on par with, and even surpasses, that of most banks. Meanwhile, its money supply (M1) accounts for less than 1% of the total money supply, and its balance sheet is very small, yet it remains one of the most profitable banks in the world.

Wilfred Frost: Let's talk about Ethereum again. Last August you told us you were bullish on both Bitcoin and Ethereum, and that you believed Ethereum would outperform in the long run. Why did Ethereum drop so sharply in the last quarter of last year?

Tom Lee:

Ethereum is the second-largest blockchain network, and I believe it will always be more volatile than Bitcoin until it reaches a similar size. The cryptocurrency market often uses Ethereum's price as a price ratio to Bitcoin. If we simply consider the ETH/BTC ratio as a price benchmark in the cryptocurrency world, then Ethereum's price ratio relative to Bitcoin is still lower than it was in 2021. And compared to four years ago, Ethereum has become a superior blockchain.

For example, tokenization, including the tokenization of the US dollar, is a major trend that Wall Street is betting on. Larry Fink calls it the biggest innovation since double-entry bookkeeping. Robinhood's Vlad Tenev wants to tokenize everything. We've already seen not only the US dollar (stablecoins) but also credit funds striving for tokenization. JPMorgan Chase is launching a money market fund on Ethereum, and BlackRock has already tokenized a credit fund on Ethereum. Therefore, Ethereum is essentially the blockchain that Wall Street is starting to adopt. If Ethereum's price-to-earnings ratio recovers to its 2021 highs, and Bitcoin reaches $250,000, then Ethereum's price could reach around $12,000. Currently, Ethereum's price is around $3,000.

Bitmine Immersion and Mr. Beast Investment

Wilfred Frost: Last week you announced a $200 million investment in Beast Industries (the company behind Mr. Beast). Mr. Beast is one of the biggest YouTube influencers in the world right now. As far as I know, his influence in the media industry is incredible, isn't it?

Tom Lee:

Yes, I think most people on Wall Street don't realize Mr. Beast's influence for several reasons. First, it's a private company , so his influence needs to be assessed through media data. Second, he's very iconic among Generation Z, Alpha, and Millennials.

He currently boasts over 1 billion followers. The only person with more followers on platforms like TikTok, Instagram, and Meta is Cristiano Ronaldo. His YouTube videos garner more monthly views than Disney and Netflix combined. Each episode of Mr. Beast's YouTube channel receives over 250 million views per month, and with two episodes released monthly, that's equivalent to the viewership of two Super Bowls per month. Furthermore, his Beast Games, launched on Amazon Prime, is the platform's number one show, surpassing the viewership of almost every movie.

Wilfred Frost: These figures are indeed shocking, but why did an Ethereum finance company invest in Beast Industries instead of companies like Disney, Amazon Prime, Comcast, or Netflix?

Tom Lee:

Yes, they are very selective about who gets into their capital structure. Mr. Beast himself (Jimmy Donaldson) is the largest shareholder, other shareholders include Chamath Palihapitiya of Social Capital, and Bitmine is the largest corporate investor on their balance sheet. As you can imagine, many companies wanted to invest in Beast Industries, and we were fortunate to be invited to participate in their capital structure.

Wilfred Frost: At Bitmine's annual shareholder meeting last week, you mentioned that Beast Industries would be launching financial products or services. Is this plan finalized? Will you be involved?

Tom Lee:

Yes, CEO Jeff Henbold has mentioned future plans for Beast Financial Services. I think Beast Industries will likely reveal more details in the coming weeks. They've been very clever, already productizing the Mr. Beast brand in several ways, such as launching Feastables chocolates, healthy lunches, beverages, and collaborations with other creators. So, for a company with a billion followers, further productization is a natural progression.

Wilfred Frost: Do you think this is a positive for Ethereum? Is it possible that Mr. Beast, with 1 billion followers, will promote Ethereum in the future?

Tom Lee:

I think this is very likely. There is a huge gap in financial literacy globally, especially among young people, because schools aren't really teaching this. Financial literacy is crucial because we know many Baby Boomers and Generation X are under-saving in retirement and can't fully rely on Social Security. Therefore, financial education is one of the biggest gaps in society today.

Mr. Beast is likely to become a leading figure in advancing financial education, which will bring tremendous benefits to society. This is one of the reasons we are interested in Beast Industries, as our corporate and social values align very well with theirs. Mr. Beast represents kindness and integrity.

Regarding the future of finance, banks have now clearly stated that blockchain is the direction of financial development . For example, JPMorgan Chase hopes to build its business on the blockchain, and Jamie Dimon has also stated that blockchain is a better way to build banks. And today, banks are choosing Ethereum as the platform for building smart contracts. Therefore, if financial education is to be conducted for the public, Ethereum should have a place in it.

Wilfred Frost: One last question. I still feel that such investments seem somewhat off-topic for a financial management company. You mentioned Orbs' "Moon Project investment" earlier. Does this mean you acknowledge it as a high-risk investment? Or do you actually consider it a strategic investment?

Tom Lee:

I understand that this may seem extremely risky to those unfamiliar with our investment logic. But it actually makes sense. From its inception, Bitmine has clearly stated that it would allocate approximately 5% of its balance sheet to the "Moon Project." At today's asset size, that's roughly $700 million in investment, and we've already invested approximately $220 million in these projects.

I believe Beast Industries is a very promising investment because it gives us access to the world's largest content creator, possibly our generation's "Mr. Beast." He's unprecedented, and likely will remain so for a long time to come. As a financial management company, our goal is not only to strengthen the Ethereum ecosystem but also to ensure its future sustainability. By establishing a potential organic partnership with Mr. Beast, I believe this will further solidify Ethereum's future. Therefore, I think this is a very good strategic move.

Final Recommendation

Wilfred Frost: Two last questions. The first is, what is your most important advice for stock market investors this year?

Tom Lee:

Yes, I think the most important advice I can give investors is not to try to time the market , because doing so will become the enemy of your future performance. Many investors always hope to buy at the lowest point and sell at the highest. But historically, whether in the stock market or the cryptocurrency market, those who truly make money are those who invest for the long term . Although I warned that there could be a lot of volatility in 2026, investors should view market pullbacks as buying opportunities, not exit opportunities. Too many people sell out of emotion and then miss the opportunity to buy back in, thus losing the compounding effect of their investments. I think this is a very important distinction.

Wilfred Frost: My second question is, what is your long-term advice for cryptocurrency investors? I believe this may be related to the points mentioned earlier, but how do you think they should invest?

Tom Lee:

Yes, I believe many listeners remain skeptical of cryptocurrency, or have never even touched it, because they may feel they can't truly understand it. We need to recognize that cryptocurrency is being embraced by the younger generation—it's become a part of their lives as digital natives. In the future, the lines between service and currency will become blurred . This isn't unlike the situation in 1995 when Bill Gates talked about the internet on "The David Letterman Show." At that time, David Letterman was extremely skeptical of the concept of the internet because he belonged to a generation that couldn't easily accept it. If Bill Gates explained the future of the internet to a 20-year-old, the young person would immediately understand, and cryptocurrency is experiencing a similar situation today.

Wilfred Frost: So how do you think people should invest in cryptocurrencies? You recommend Bitmine, but should they hold a basket of cryptocurrencies? Or should they invest in treasury companies? Or should they allocate Bitcoin and Ethereum in a 2:1 ratio?

Tom Lee:

I believe a two-pronged strategy is appropriate. First, there's a theory called the "Lindy Effect," and I suggest only buying cryptocurrencies that have been around for a longer period, such as Bitcoin and Ethereum. Second, I think cryptocurrencies may become a "settlement layer" in the future, although it may be invisible. Bitmine not only acts as a settlement layer for the industry, but through our investments, we are actually becoming a financial services company. Therefore, investing in Bitmine is not just investing in Ethereum; you are also investing in a company that is driving the future of finance.

CoinShares：上周数字资产投资产品净流出1.68亿美元

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