Fundstrat's Tom Lee: Crypto looks like it is bottoming now

Speakers

Scott Wapner — Host

Tom Lee — Fundstrat / Chairman of Bitmain (per transcript)

Summary

Tom Lee asserts that the crypto market is currently bottoming following a 40% drop in Ethereum over 10 days, predicting a V-shaped recovery similar to seven previous historical instances.
Despite fears of a "death spiral," Lee highlights that Ethereum network fundamentals are strengthening, with active addresses up 117% year-over-year and major institutions (UBS, Fidelity) continuing tokenization projects on the blockchain.
Lee defends the solvency of "Bitmain," stating the company holds 4.3 million Ethereum and $600 million in cash with zero debt, generating $360 million in annual net income despite the stock's recent drawdown.

Trade Ideas

Ticker	Direction	Speaker	Thesis	Time
CRYPTO MARKET /ETH	LONG	Tom Lee Managing Partner and Head of Research, Fundstrat	Ethereum has suffered a "waterfall decline" (down 40% in 10 days), and sentiment is at rock bottom, comparable to the FTX crash in November 2022. Lee argues this is a capitulation bottom. Historically, Ethereum has experienced seven drawdowns of 60% or more in the last eight years; every single one resulted in a "V-shaped recovery" (recovering as quickly as it fell). Furthermore, the "utility" of the network is expanding regardless of price, as Wall Street moves financial infrastructure (tokenization) onto Ethereum. Active Ethereum addresses are up 117% year-over-year (parabolic rise in the last 3 months). Major firms like UBS, Standard Chartered, and Fidelity are tokenizing products specifically on Ethereum. Continued volatility or a failure of the historical V-shape pattern to materialize.	2:41
BITMAIN	LONG	Tom Lee Managing Partner and Head of Research, Fundstrat	The stock is at a 7-month low, tracking the drop in Ethereum prices, leading to fears of financial distress. Lee argues the sell-off is purely correlated to the asset price (ETH), not company insolvency. The company is a debt-free vehicle designed to track Ethereum with yield. Because it has no leverage, there is "no risk" of a liquidation event or bankruptcy; it simply waits for the ETH price to recover. The company holds 4.3 million Ethereum (earning 3% APY) and $600 million in cash (earning 4% APY). It generates ~$1 million per day ($360 million/year) in net income. Continued depression in Ethereum prices, which the stock tracks.	0:20
MSTR	WATCH	Tom Lee Managing Partner and Head of Research, Fundstrat	MicroStrategy recently made a 25% move upward despite the broader crypto slump. Lee views this price action as a leading indicator or signal that the broader crypto market is finding a bottom. A specific "25% move" cited as evidence of the turn. False breakout or decoupling from broader crypto trends.	2:15