Tom Lee - Wall Street’s Biggest Macro Shift Since the Gold Standard - TOKEN2049 Singapore 2025

We've been writing about crypto for about nine years now. And at that time, Bitcoin was originally $963. And as of September 26th, as you can see, Bitcoin has been the OG asset class, returning over a 100x since then. that's had twice the return of Nvidia, which has been a 65x and has dramatically outperformed gold, which has roughly tripled uh in that same 9-year period. And as an aside, Ethereum has outperformed even Bitcoin, delivering a 500 period of time.

Okay, so uh let me level set. The reason I think 2025 is the biggest macro shift since the gold standard is I got to take you back to 1971. And in 1971, the dollar went fully synthetic. That was the year that Nixon ended the convertability of dollars into gold. Now, think about that for a moment.

In 1971, the dollar no longer represented anything except another dollar or promise to repay. And when we think about that, most people said, "Well, gold was the trade in 1971." That's true, but it wasn't really the big opportunity. In 1971, the financial system had to suddenly think of ways to make sure that dollar remained dominant because if the dollar wasn't convertible into gold, another currency could be dominant. And so what Wall Street did was they created a huge market for the dollar.

money market funds, futures, debit cards, mortgage back securities, currency swaps, interest rate swaps, index futures, zero co-onds, etc. That was the innovation that followed 1971. And in fact, seven of the top 30 largest companies in the world now are financial institutions. Okay. Well, another thing is happening today, which is that Wall Street and AI are building on the blockchain.

And in the US, the groundwork was laid with a Genius Act, which set the stage for a stable coin boom. And then the SEC launched Project Crypto, which is moving Wall Street onto the blockchain. And there, of course, are two other pieces of legislation underway in Washington. One is the clarity act and the other is the Bitcoin strategic reserve bill. And uh what that means is that we now have a new moment in 2025 which is we now have more things becoming synthetic.

And so that's why Bitcoin of course uh remains the OG in our view because you now have a digital store of value. But I think you want to think about the other side of that ledger. What is Wall Street going to do? And in our view, Wall Street is going to play a very significant role in creating a market for digital assets. And in and in our view, the biggest winner here is Ethereum.

So, let's think about what it means for Bitcoin's upside. If gold today is at 4,000 per ounce and maybe it'll get to 5,000 per ounce, well, we want to think about what Bitcoin's gold Bitcoin to gold ratio is. You know, what percentage of Bitcoin's network value should mirror that of gold. And if it's only at 10%. Then you get $140,000 value for Bitcoin.

I think that number is too low. I think it's going to basically match gold's value or even exceed it. And that's how you get to the 1.4 to $2.2 million of value per Bitcoin.

So, uh, we're still quite bullish on Bitcoin here at around 110,000. But let's think about this other story arc that's going to develop, which is Wall Street is going to innovate on the blockchain over the next 10 to 15 years. Okay? And part of the story arc is, we've already seen it, is that we're talking about stable coins, which is tokenized dollars. So that's almost like the 1971 moment, but we're talking about tokenized equities, tokenizing credit, real estate, reputation, and eventually intellectual property.

All things that are measured in the economy today. And I think there's going to be invisible measures that get monetized on the blockchain. data collection, royalty payments, loyalty programs, agentic AI, and even important things like proof of human. So, a lot will happen on crypto. And we already know Ethereum has experienced this check GBT moment because of stable coins.

Um, here's just a list of different companies and entities that are building stable coin projects. And you might wonder, why does the US government care about stable coins? Well, it's the same reason the US cared about the synthetic dollar staying strong. Today, the US dollar is 27% of GDP, but it's 57% of central bank reserves. That 57% shows you that Wall Street's efforts to make the dollar the standard of transactions after 1971 was effective.

It's 88% of financial market trades. Okay. But it's it's basically 100% of stable coin denomination. So by moving to a synthetic dollar tokenized on a blockchain, the dollar could become even more dominant. And collectively stable coins hold are the 12th largest holder of treasuries in the world.

By the way, that's at about 280 billion of stable coin outstanding treasuries. Secretary Bessant thinks it could be a $4 trillion market, but it once stable coins own more than one trillion of treasuries, they will become the single largest holder of treasuries in the world. It's not that far away. And equally important, when companies build on the blockchain, they do re essentially rearchitect their business. They're able to actually become more efficient.

And I think uh there's a lot of reasons for this. And by the way, as a side note, many of you wonder how does AI fit into this idea of building on the blockchain. A16Z had a nice white paper. There's 11 sort of use cases for what you want to build on the blockchain around AI. I'm just going to highlight a few things like number three forward compatible proof of personhood.

You know, that's like a project like Worldcoin. Uh number six, keeping AI vibe coding apps in sync. I think an example of this is uh a device I'm wearing which is Ukritter and this is measuring the CO2 uh wherever you are uh the ideal number is 420 uh and it's currently at 980 so there's a lot of uh rebreathing of air in this room and they actually say you shouldn't make any important decisions when the CO2 is above 600. Okay. Uh but you might and we get asked all the time, what is the benefit of Wall Street building on the blockchain?

They'll say that banks work fine. Uh what I don't see how JP Morgan could become more profitable. Well, actually, companies that are natively built on the blockchain are inherently more profitable. For instance, Tether is raising capital at a $500 billion valuation. Look at the list of the 12 largest banks in the world.

Tether is the second largest. I mean, think about that. Tether is 50% bigger than Bank of America. And Bank of America is a giant. It's twice the size of Cityroup, twice the size of Morgan Stanley.

It's even bigger than Goldman Sachs. Okay. But here's what's interesting. If you look at the number of employees at Tether, okay, JP Morgan is a $869 billion market cap company with 317,000 employees. That's a market value of $2.

8 million per employee. Tether has 150 employees. That's less than JP Morgan's analyst class, you know. Um, it's probably like the June analyst class. And so that means Tether has a market value of $3.

3 billion per employee. I think that's what you have to realize. Tether, which is a native blockchain company using public chains, has a value nearly the size of JP Morgan and with only 150 employees. So as exhibit A in my opinion clearly building companies and rebuilding Wall Street on the blockchain is very profitable. Okay.

So now I want to sort of fork this into the idea of why this benefits Ethereum and even how you think about digital asset treasuries. So as I said this 1971 moment is happening to Ethereum in 2025. And why is that? Well, all these firms on Wall Street need to be building something on a blockchain and they want to build it on a neutral public chain. And as you can see, there are many companies choosing to do this on Ethereum.

In fact, if you look at something like value locked um on public chains, uh Ethereum is the chain of choice. So, they have 68% of all total value locked. And of course, TVL has acted as the floor for Ethereum in the last few cycles. Uh even swift uh as you know last a few days ago announced that they're going to run experiments with onchain migration using a layer 2 on Ethereum. So again, Swift is a company that is showing that they want to use a public chain, not a corporate chain.

And uh on AI, there's a lot of talk about Ethereum is the place where you're going to be building AI products. Okay, so what does this all mean? Well, here's Ethereum's price history since 2018. It made its high in 2021. Okay, and then you could see this huge massive consolidation over the last four years and we're beginning to break out of this range.

I would look at the prior period of consolidation. Ethereum was consolidating from 2018 to 2020 2020 and then the token went from $90 to 4,866 or more than a 50x return. The low for this cycle was 1385. So where will Ethereum go? I mean one I I have some thoughts I'll share but again if you look at this chart it's not bearish.

Okay, this is a bullish chart. And another chart to think about is Ethereum's price ratio to Bitcoin. Um, it's currently at 0.036. The average has been 0.

047 and the high in 2021 was 0.087. I think that these numbers matter because to me Ethereum is having its 2025 moment like 1971. I think its price ratio should at least recover to its prior high of 0.087.

So what does that mean? Well, if you look at Bitcoin's price, and we think it'll be at least 250,000 by the end of this year. Okay, that's the rows. So, it's the second to last row. If Ethereum price ratio gets to its 8-year average of 0.

0479, 0479. That implies 12,000 per Ethereum token. If it gets to its 2021 high, which I think is justifiable given how much is happening fundamentally on uh Ethereum, that's $22,000 per ETH. Okay. But I don't think that's the ceiling.

The ceiling, sorry. Another way point is that Ethereum becomes the payment rails of the future. And so its network value matches Bitcoin. Well, that would be $62,000 per E token. So with ETH at 4,100, as you can see, each of these three values represents tremendous upside.

So let me get to this last point about if you're interested in ETH, why would you consider owning a digital asset treasury company? Now, we post this on our website at Bitmine every month called the chairman's message, but I'm going to run through this quick because I want to cover this in a few minutes to try to have Q&A. But an ETH treasury goal is to increase your Ethereum holding per share because they can issue stock at a premium, buy more ETH. Okay? And the case study to watch is Micro Strategy who went from which went from 13 to $335 per share.

The way Micro Strategy did this was issuing shares to buy more Bitcoin. And in the five years since Micro Strategy started the strategy, Bitcoin was at 10x 11,000 to 108,000. But Micro Strategy stock went up by 25 times. Meaning they outperformed Bitcoin by using their treasury strategy. And Bitmine is following the playbook.

Today's the second largest holder of Ethereum in the world. uh raising capital at a pace faster than Micro Strategy. But one of the keys of course is Bitmine and there's a lot of treasury stocks out there is one of the most liquid names. It is ranked number 26 in the US stock market today trading $2.6 billion a day.

Uh Bitmine trades more per day than Visa and Open Door and it trades almost as much as Marvel Technologies or INQ on a daily basis. Now, that's been an advantage because you can see when you look at the 200 treasuries out there, Bitmine and Micro Strategy represent 84% of all the trading volume. So, that's where the institutional flows are going to be going in terms of companies holding the stock and that's allowed Bitmine to grow its treasury holdings rapidly. You can see that in the roughly 9 weeks since the company started, the Ethereum held per share has increased by nine times. So that velocity means we vastly outperformed Ethereum.

So if you're looking to be bullish on Ethereum, an Ethereum Treasury stock can deliver you more Ethereum every day. But that's not where it ends. Ethereum treasury companies I believe are crypto infrastructure businesses because Ethereum is a proof of stake companies will stake their Ethereum in exchange for providing network security and that generates a yield and we believe over time anybody who tokenizes on Ethereum is going to ultimately stake E for the same security reason and that's the strategy at Bitline that we're going to be a community participant in really making sure the Ethereum Foundation and Ethereum developers are successful on DeFi and the company will make moonshot investments to seed these crossover Wall Street to crypto uh enty entities. One of the first investments was Bitmine's investment into 8CO which is orbs and the worldcoin project. I think that there's a bright future for crypto.

Uh we think Ethereum is really going to be the place where a lot of of this gets built. Um and with that I would like to take questions. If you have a question I think you just raise your hand and someone will come with a a microphone.

Hi. Um just with when you say that um Ethereum is going to be part of the digital digital asset strategy for Wall Street going forward, would you say this is very likely the the long-term plan and that there's probably going to be not as much room for Salan or Sooie or any other chain to catch up because of the the decision on Wall Street to go all in on Ethereum. uh the you know the question is is this going to be uh only one chain that survives? Uh I I don't think so. Um if you look at Wall Street today uh there are dozens of different infrastructure uh platforms and models that exist.

I mean even look at something like exchanges. Uh there's multiple large exchanges globally um from CME to NASDAQ to NYC. Uh so I I think that there is going to be a large enough pie. I mean think about this. What we're talking about is global GDP is 80 trillion.

Half of all economic activity is a financial transaction. That's 80 trillion of addressable annual market. But I'm also saying that a lot of GDP IP royalty moves on chain. That's let's say 20 trillion. So you have a hundred trillion dollars of activity.

If that's all on Ethereum, Ethereum is going to be like $10 million, right? Um so there's plenty of room for L layer ones that specialize. So I think there's room for the Salanas and other chains out there. And I I think the one thing we just have to remember is that we don't want to be too tribal in and really compartmentalize the world today. I think it's a huge opportunity.

Uh hi Uh firstly I really like your presentation presentation and your PPT I think it's really good and then you you think ERM and the Bitm will go bullish market and you compare the ERM and the Bitm uh with the micro strategy MSTR uh but MSTR they are going through like a a few circles of bullish and bearish market. So if you are preparing a long-term climb so do you have any strategy for facing bearish market because you know for the digital asset treasury um if Ethereum going down downwards and the stock of Bman will also going downwards more okay um it's a good question the question is basically in a bare market. How does a treasury company survive? Um there's two things that I think a treasury company needs to do. One is and the first principle is it needs to keep a clean balance sheet.

Bitmine has no debt. in fact has been carrying around $500 million of cash uh every week because in a downturn investors who own a stock don't want their stock to compete with someone else on the balance sheet. So a debt holder competes with a shareholder. A convertible bond competes with a shareholder. So that's why in a downturn a company with a complex capital structure can see their stock compress.

The second is the company needs to keep adding Ethereum per share because let's say that the winter comes in 12 months. Okay? Well, Bitmine has been adding 30 cents a day of Ethereum. So, in 12 months, instead of $40 a share worth of Ethereum, it could be $80. So then if the crypto winter happens, the stock might fall 50%, but it'll be higher than where it is today.

So I think a treasury that's adding Ethereum per share is prepared for the winter because it's building the intrinsic value. Thank you everybody. I hope uh you learned something.