Tom Lee: Crypto to be bullish over next 12 months

Tom Lee, who leads research at Fundstrat Global Advisors and chairs BitMine Immersion Technologies, forecast a bullish 12-month period for crypto. He cited a market bottom and growing use of tokenized assets. BitMine holds 5.93 million ether and reports the position is about $5 billion below current market value.

Lee pointed to an October 10 liquidation event last year that removed about $19 billion in leveraged positions in a single day, saying that wave of forced selling cleared many leveraged bets. He expects the bottom of crypto’s four-year cycle to occur next month. Bitcoin trades near $77,315, roughly 39% below a recent peak above $126,000, and ether was trading around $2,533.

He highlighted tokenization, the process of putting stocks, bonds and funds on blockchains, as a source of long-term demand. Lee estimated that shifting $100 trillion of assets on chain and capturing 1% of the activity could generate roughly $1.1 trillion a year in income for service providers. Valuing those returns like a conventional business would imply about a $20 trillion market opportunity.

Current on-chain tokenized assets remain small by comparison. About $60 billion of assets were tokenized on blockchains as of late May, and more than half of that balance showed no weekly transfers, which points to limited active use. Some market participants describe the practice of wrapping and parking existing assets on chain as “tokenization theater.”

Regulatory developments are also in play. Lawmakers in Washington have scheduled a vote on whether to debate the CLARITY Act, a proposal that would place spot crypto markets under the Commodity Futures Trading Commission’s authority. Lee noted that the CFTC already acts as the primary regulator for those markets.

Fundstrat has recommended a 2% crypto allocation for client portfolios for more than a decade. According to Lee, accounts that followed that guidance and added exposure now hold crypto as more than 85% of those portfolios. On his outlook, Lee said: “I think it’s going to be a really bullish period for crypto for the next 12 months.”