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Hi, I'm Tom Lee. I am the president of Bitmain Immersion Technology. And this is our message from the president for October 2026. The title of my presentation is: The crypto bull market is underway and it's likely to be the biggest cycle yet. There are some things I want to discuss. The first is to explain to them why a full-blown crypto bull market is underway.
First and foremost, we have institutions like Franklin Templeton, Fidelity, and others saying that there is an ongoing crypto bull market. That had never happened in any of the previous cycles. Another thing to note is that Bitcoin surpassed the 200-day moving average on August 19. The last time this happened was on August 24, 2025, and as you can see from this chart, Bitcoin had a big move above 100,000.
In fact, since 2010, whenever Bitcoin is above its 200-day moving average, the 6-month return averages 193% with an 80% success rate. Those are pretty strong probabilities. And since 2012, for example, there have been nine crossings above the 200-day moving average. Eight out of nine were bullish market signals.
Flows into Bitcoin ETFs have also turned positive so far this year. That doesn't happen in a bear market. And observe the performance. In the third quarter, cryptocurrencies crushed other macro assets by a wide margin. Ethereum outperformed the S&P by 6,500 basis points. Keep in mind that this occurred amid an aggressive Fed, rising oil prices , rising global bond yields, and tighter financial conditions .
Therefore, the superior performance of cryptocurrencies against all of that is a sign of a bull market. And Tom DeMark, Bitmain's exclusive advisor, says we are confident that Ethereum markets will continue to trade upwards. When a market rises 100% from its low, it is often an indication of a possible trend reversal.
And finally, remember that October 5th is the bottom of the four-year cycle, which means that Bitcoin's bear market is over and a bull market is beginning. So , as you can see, it's all a matter of math. Now, we believe this crypto bull market should be bigger than past cycles. Basically, the biggest bull market we've ever seen.
And I'll give you some reasons. The first is tokenization. In our opinion, tokenization is a much bigger driver than other bull markets. In 2016-2017, it was the boom of ICOs, mainly retail. In the 2019-2021 era, it was NFTs, primarily retail. Last year was the boom year for stablecoins, but it was interrupted by the massive debt deleveraging event on October 10.
But now it's different. BlackRock wants to put most of its assets into tokenized form. Vlad Tenev of Robinhood says we are at the beginning of a supercycle. In fact, he thinks that everything that runs on traditional rails will eventually become on-chain/tokenized. And it's a huge addressable market.
The total amount of liquid assets worldwide is around 200 trillion, but the three main ones alone, stocks, bonds and credit , would add up to 160 trillion. For every dollar that is tokenized or deposited as total value locked (TVL) on an L1 blockchain, approximately $1 of value is created for the network.
So, if 10% moves on-chain, that creates a $16 trillion market. And, of course, as you can see, much of this is being built on Ethereum, whether it's BlackRock, JP Morgan, or even Robinhood. And Ethereum benefits from the deepest community, with more developers combined than any other blockchain. So, this is the tokenization wave.
It is institutional, unlike previous waves. Second, there is an element of wealth transfer here. Vlad Tenev recently mentioned that there is a $100 trillion transfer underway, and I think many investors don't realize that it's already happening. For example, in the last three years—look at this—more than 1.5 trillion dollars has been inherited from someone who passed away, probably a baby boomer , to someone who is a millennial or from Generation X.
And that, of course, changes the mix of what they own. In the 2019-2021 crypto bull market , there was some inheritance, but it was a small effect, about $450 billion. But look at this upcoming bull market. There could be between one and a half trillion and two trillion dollars being inherited. Again, a pronounced shift away from credit towards digital assets and stocks.
I believe that much of this allocation comes from private equity and private credit, which will face tremendous headwinds as yields have risen. And keep in mind that institutional FOMO exists because cryptocurrencies were the best-performing macro asset amid tightening financial conditions. Imagine what will happen in the fourth quarter, again, as a bull market begins.
DApps will also contribute to a larger bull market. DApps are an ally in a bull market. Although many people question the role of DApps, especially since only four DApps trade above net asset value (NAV), including Bitmain. These other DApps will recover in the bull market. So, think about that. They will be absorbing the supply.
Therefore, in a bull market, DApps support L1s. For example, Ethereum DApps combined hold $21 billion in Ethereum. That 's 7% less of the available network. And in other bull markets, this entity that absorbed so much supply did not exist. So, guess what? If demand is recovering and supply has decreased, we should expect large price movements.
And keep in mind that cryptocurrencies are a story derived from AI. We've talked about this before, but as the memory and chips were fixed, the Magnificent Seven software and cryptocurrencies were bound to win, and that's exactly what happened. And we know why. Agents will carry digital wallets and represent a growing part of all traffic, and of course we should be concerned about their capabilities.
We need to keep humans in the cycle, and of course, that's where cryptocurrencies play a role. And that brings us to Bitmain. We believe it is very well positioned to overcome this cycle. So the first thing the company is doing is maximizing its exposure to ETH in this bull market. Ethereum has been limited to a range for the past 5 years.
But it has risen out of those ranks in the past. A movement of 227 times in 2016, one of 54 times in 2019-2020, and with tokenization and generative AI, could this be a movement of 25 times? Probably. And look what happens to Bitmain's stock price. Bitmain has a 90% correlation with the movement of ETH.
So, if ETH reaches 22,000, that represents 300 to 500 for Bitmain's shares. If ETH reaches 62,000, that's $1200 to $1500 per share. And Bitmain is currently at 26. Bitmain is also reaching our target of 5% of the Ethereum supply because that optimizes shareholder value. The company achieved a lot in its first year of operations, but notably we reached almost 6 million ETH and are very close to our 5% target.
Here is the progress we made since June 30th of last year and you can see that it took 15 months to reach 6 million ETH. And all of that happened in the midst of a bear market. So we need to get about 100,000 more ETH and that's it . Here's the thing. All that accumulation took place in this bear market here.
And now we've finished accumulating as a bull market begins. So if we finish accumulating but ETH rises a lot, you can imagine that we will outperform Ethereum. And that has followed the price of treasuries, but they should perform better and that's what we've done. Bitmain outperformed Ethereum by 48,000 basis points in 2025 .
Think about it. From June 30 to December 31, Ethereum rose by 22%. Bitmain rose 500% and in 2026, in the midst of a bear market, Bitmain rose 3% while Ethereum fell nine%. And in total, 53,500 basis points of superior performance since its creation. I would say that we are clearly outperforming ETH.
One of the reasons for this is that we executed the largest crypto buyback in history . On July 14, Bitmain began a share buyback, which was practically at the lows. Then we bought back 21 million shares, the largest crypto buyback ever seen, $350 million, and completed it on August 17, but as you can see, that helped set the minimum for Bitmain's stock price .
And we issued a credit in ETH. And I don't know if they've really appreciated how much it's outperformed the market. We issued it at $80 per share in June 2026 and it's currently at $99. So it's a much higher performance, but consider this. It has been in the midst of a major bear market for bonds. Treasury bonds have fallen 8% in that same period.
Investment grade fell by six, high yield fell by three. And yet, Bitmain has gained 24% in price. That's a pretty substantial return on investment. And as you can see, the cost of debt for Bitmain's perpetual preferred shares, or the cost of funds, is actually 9.56%. It is much lower than that of a Bitcoin or Solana treasury.
And finally, we want to leverage our substantial scale to optimize opportunities in both tokenization and the Ethereum ecosystem. The most important thing is Maven. It is the world's largest single-party staking operator , managing $2 billion in third-party crypto assets. But as you can see, this also allows us to generate substantial staking rewards , close to one million dollars a day.
And we have our risky bet on 8 co. It is the largest holder of tokens in the world. It is the crypto project co-founded by Sam Altman. However, it has a large stake in OpenAI. And they can see that similar companies are trading at six times their net asset value (NAV). I think 8 co is a great investment for us.
We are also the largest corporate shareholder of Beast Industries. Mr. Beast owns and acquired Step Financial. We believe they will create a financial services empire that will be the Robinhood, Chime, and SoFi for Generation Z and Generation Alpha. And we have led the investment in the Ethereum Foundation spin-offs.
Eth Labs, Ethereum Institutional and Eth Systems. We are the main investor, of course. We all want to support the ecosystem. So, in conclusion, the real money isn't in buying and selling, but in waiting, according to Charlie Munger. He is the original "hodler" . And of course, this comes at a time when we could be facing the biggest crypto bull market in history. Thank you for listening, and I will speak with you soon.
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