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The second difference in this bull market is there's a huge wealth transfer taking place. I don't think people have talked about this enough, but Vlad says it's a hundred trillion over the next 10 years. We can see this. This is from the IRS. In the last crypto bull market, okay, there was 400 billion dollars of inherited wealth.
In the next cycle, it's probably close to 1 and 1/2 to 2 trillion. This is a baby boomer or older passing away, it's inherited by a millennial. That allocation goes from bonds to equities and crypto. Massive, massive inflows. A lot of it's going to come out of private equity and private debt, at least 12 trillion.
So, consider that a massive buying power. Tom Lee believes the crypto market is entering a bull run that could make previous cycles look small by comparison. And what makes his latest outlook particularly interesting is that he is not basing this prediction on Bitcoin's price action alone. The Fundstrat co-founder argues that the market is already displaying the characteristics of a full-blown crypto bull market.
Even as investors remain skeptical after months of uncertainty, painful corrections, and disappointing price action. According to Lee, institutional support is growing, technical indicators are flashing bullish signals, ETF flows are returning, and cryptocurrencies have demonstrated remarkable resilience despite hostile financial conditions.
In his view, the market is showing precisely the kind of strength that investors tend to overlook when a new bull cycle is still in its early stages. What makes this prediction even more compelling is that Lee sees several additional forces converging at the same time, including an unprecedented generational transfer of wealth, the growing influence of digital asset treasury companies, and the emergence of artificial intelligence agents that may increasingly depend on crypto to transact independently.
These developments could create sources of demand that simply did not exist during previous bull markets, potentially changing how capital enters the ecosystem and how much value blockchain networks can capture. If you appreciate this kind of in-depth crypto market analysis, take a moment to like this video, update.
Your support helps the channel continue bringing you important insights from leading voices in the crypto and financial markets. Now, let's get into Tom Lee's argument for why this bull market could be much bigger than investors expect. You might be doubting if it's a crypto bull market because people think it's fragile, but that's exactly what happens at the start of a bull.
So, let me walk you through my presentation. So, first, we are having a full-blown crypto bull market. There are too many signs that have happened that only happen in a bull market. Um so, let me start. The first is we have institutional backing. I mean, it's not just Franklin saying a bull market is starting, it's Fidelity, BlackRock, all the major players.
I've never seen this in the past three cycles of crypto winters, never seen institutions declare this. We also have a technical argument. Bitcoin is above its 200-day moving average. That happened on August 19th. Also on August 19th, Ethereum had a golden cross. But see, the last time Bitcoin crossed above its 200-day, that was August of last year, April of last year.
But since 2010, Bitcoin averages 80% positivity over the next 6 months, 200% gains. Ethereum averages 290%. Okay. Now, you can see this on a chart cuz I can make it simple. These are the other crosses above the 200-day. Out of the last nine crosses, eight were bull market starts. We also have positive ETF flows.
You don't have positive flows into crypto in a bear market, only in bull markets. Only in bull markets for equities do you have positive flows. And then we have proof positive because crypto in the third quarter of this year, June to September, was the best performing macro asset by a country mile. The AI stocks were down in the quarter.
[snorts] We had very terrible financial conditions. We had a hawkish Fed, surging oil, global bond yields going up, and tight financial conditions, yet crypto outperformed. That's what happens in a bull market. Crypto is ignoring the fact that basically the Fed's been hostile. And lastly, uh it's from coming from Tom DeMark.
He is the [snorts] ex- one of our exclusive advisors for timing. He's saved Bitmain at least $100 million this year. He is worth his money in gold. And he says we are confident Ethereum will continue to trade higher. He thinks Ethereum should easily break 3,000 in the next few weeks. And lastly, I know it's a bull because the four-year cycle bottomed.
So, if you set your clock, the bottom was October 5th. So, we are two days past the bottom for crypto. So, in short, it's all in the math. Uh we are in a bull market. But here's the thing. This may be the biggest bull market uh we've ever seen, okay? So, I'm going to give you four reasons that this bull market is different than other bull markets, okay?
So, as Joe Lubin says, you're not bullish enough. Okay? The first is there's a big institutional story around tokenization. In the bull market of 2016-2017, that was about ICOs. It was a retail story. 2029 or 2019 to 2021, that was an NFT boom, but that was a retail boom. Of course, some new tech and great tech came out of that.
Last year, we had a stablecoin boom that was cut short by that October 10th auto deleveraging event that wiped a lot of people out and started a huge crypto winter. But here we are. We have an institutional wave coming. BlackRock, asset managers beyond BlackRock, want to tokenize everything on blockchains.
Vlad, CEO of Robinhood, who I think is going to end up being a top 10 financial institution within a decade, says, "We are at the beginning of a super cycle. Everything running on traditional financial rails will be tokenized." That's a massive wave. How big is that wave? Well, crypto member is a $2 trillion market.
There's $200 trillion of liquid assets outside of crypto today, growing by $7 trillion a year. If you ever wonder if there's money to be building data centers, there's $7 trillion of new money every year. Just the top three markets alone is $160 trillion that can go into crypto. Remember, the ratio is 1 to 37.
A trillion dollars going into crypto would turn it into a $37 trillion market. And of course, a lot of this is happening on Ethereum. BlackRock, JPMorgan, Robinhood, they're building on Ethereum. Ethereum, of course, has a massive community. The number of developers today is equal to the entire rest of the community combined.
So, it's a massive wave. The second difference in this bull market is there's a huge wealth transfer taking place. I don't think people have talked about this enough. But Vlad says it's a hundred trillion over the next 10 years. We can see this. This is from the IRS. In the last crypto bull market, okay?
There was 400 billion dollars of inherited wealth. In the next cycle, it's probably close to one and a half to two trillion. This is a baby boomer or older passing away, it's inherited by a millennial. That allocation goes from bonds to equities and crypto. Massive, massive inflows. A lot of it's going to come out of private equity and private debt, at least 12 trillion.
So, consider that a massive buying power. And of course, I think this is explaining why we're having a huge, huge outperformance. I mean, staggering outperformance. Tom Lee's first major argument is that the current crypto market has several characteristics he associates with the beginning of a powerful bull cycle.
From institutional endorsements and positive ETF flows to Bitcoin's technical positioning and crypto's performance during a difficult macroeconomic environment. But the more significant part of his analysis is the combination of institutional tokenization and a generational wealth transfer that could introduce substantial new capital into digital assets.
If traditional financial institutions continue moving assets onto blockchains while younger investors inherit wealth from older generations and allocate more of it toward equities and crypto, the resulting demand could extend well beyond the flows that typically accompany a speculative market rally.
Lee's central point is that the potential pool of capital is enormous and crypto does not need to capture all of it for the impact on valuations to be substantial. However, the institutional transformation Lee describes is only one part of the story. He also believes digital asset treasury companies could become an increasingly important source of structural demand by accumulating Bitcoin, Ethereum, and other cryptocurrencies, potentially removing a meaningful portion of circulating supply from the open market.
At the same time, he sees another major development emerging at the intersection of artificial intelligence and blockchain technology. As AI agents begin carrying out tasks, making decisions, and conducting transactions with less direct human involvement, they will need reliable ways to hold and transfer value, verify transactions, and interact with digital services.
This is where Lee's Ethereum thesis becomes particularly interesting because he believes crypto's role in the AI economy could extend far beyond speculation and become part of the infrastructure that enables autonomous digital commerce. The third thing [clears throat] that's happening this cycle that didn't [snorts] happen in past cycles are the digital asset treasuries.
You're wondering, what role can they play? Well, foremost, the DATs are the friend of crypto in a bull market. Okay? In this bear market, people wondered, do DATs make sense? By the way, Bitmain is a digital asset treasury. And that's because in this bear market, only four digital asset treasuries are trading above their net asset value.
How about including Bitmain? But, in this next bull market, I think all these DATs are going to recover. And they're going to start buying crypto. In a bull market, that means they're going to support the underlying blockchain. Why is that? Well, cuz they take out supply. The Ethereum DATs own 7% of crypto supply today.
Bitcoin owns The Bitcoin DATs own 6 and 1/2 percent. The Solana dots 3% but look at Hyperliquid. I mean it's been a very successful chain and project, but part of it is the Hyperliquid debt owns 14% of the supply. When you take out supply, take it out of the market, and then you have a bull market, guess what?
The price is going to go up a lot more. And the Ethereum dots own the largest of the big three, 7% of the supply. That's That's not, you know, in the last bull market that didn't exist. That's why if you think about what's the upside for ETH, I think you're underestimating how much it can move. And lastly, there's a new story.
You can see it out in this conference in the exhibitors, crypto is an important downstream AI story. So, AI is of course a mega trend. But everyone thinks it's just about semis and memory and bottlenecks, but that's not true. As the semis and the memory have corrected, the downstream stocks have outperformed.
Mag 7, software, and crypto. Uh A16Z Marc Andreessen and there, I know your next panel has someone from A16Z. They consider agentic payments the grand unification of AI and crypto because AI agents are going to carry money. They might carry a Visa card in their wallet, but most likely they're going to carry a crypto wallet.
And we know non-humans are becoming the dominant source of traffic. In fact, today they're also the largest consumers of crypto compute tokens in AI. Is other agents. And we have to be careful because agents can now bypass CAPTCHA. We can't even tell who's who. So, we going to need to keep humans in the loop.
This is where crypto and finality and smart contracts and enforcement all come into play. So again, [clears throat] I don't think you're bullish enough. This is the biggest crypto cycle ahead. And I I just want to emphasize that. So whatever you thought your upside would be or if you're doubtful we're in a cycle because you've sat through the last 12 months and it's been pretty tough.
We can see it here. This conference has so much crypto energy. [snorts] That was also true of KBW last week and it's a big change from what we've been experiencing. Tom Lee's analysis presents a bullish case built on several forces that could reinforce one another over the coming years. Institutional adoption is bringing traditional financial assets closer to blockchain infrastructure.
The transfer of wealth between generations could change how trillions of dollars are allocated and digital asset treasury companies may create additional demand by accumulating assets that would otherwise remain available to trade. Each development has its own uncertainties, but Lee believes their convergence could make this cycle fundamentally different from the retail-driven booms that defined earlier periods in crypto's history.
His argument is not simply that Bitcoin and Ethereum could rise again, but that the market is potentially entering a new stage of adoption with a much broader base of capital and demand. Ethereum stands out in this thesis because Lee sees it as one of the networks positioned to benefit from both institutional tokenization and the growth of AI-driven financial activity.
If traditional financial institutions continue building blockchain-based products and AI agents increasingly require programmable payment systems, Ethereum smart contracts and established developer ecosystem could become important parts of that infrastructure. The idea that autonomous software could hold crypto wallets, initiate payments, and interact with smart contracts introduces a potential source of blockchain activity that earlier bull cycles did not have.
That does not guarantee that Ethereum will capture the largest share of this opportunity, but it explains why Lee believes investors should look beyond short-term price movements when evaluating its longer-term potential. Ultimately, Tom Lee believes the next crypto bull market could be much bigger than the market currently anticipates because the forces driving it are expanding beyond the traditional crypto investor base.
Whether his prediction proves correct will depend on how these developments unfold, but his broader argument is clear. Institutional adoption, changing wealth allocations, digital asset treasuries, and AI-powered transactions could reshape the demand for blockchain assets in ways previous cycles never experienced.
Do you agree with Tom Lee that this could be the biggest crypto bull market yet? And do you think Ethereum will emerge as one of the biggest beneficiaries of the AI agent economy? Let us know your thoughts in the comments below. If you enjoyed this analysis, remember to like the video, subscribe, and turn on post notifications so you stay informed as the market develops. Thanks for watching.
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