Wall Street institutions are getting closer and closer to the crypto universe. According to Tom Lee, president of BitMine, this development would support the market over the next twelve months. His scenario is based on the growing adoption of blockchain by traditional finance, BitMine’s exposure to Ethereum and a market that he believes is cleaned up after excess leverage. However, American regulations remain more uncertain.
In brief
- Tom Lee anticipates twelve bullish months for crypto, driven by the growing adoption of blockchain by Wall Street.
- BitMine is significantly increasing its exposure to Ethereum, with almost 5% of the ETH supply held.
- The market appears healthier according to Lee, after eliminating some of the excessive leverage.
- Listed crypto stocks are showing strong performance, which could attract more institutional investors.
- The CLARITY Act remains a point of uncertainty, after a procedural setback in the US Senate.
Wall Street begins to treat blockchain as financial infrastructure
Tom Lee defended the idea of a very favorable period for cryptos during the next twelve months in an interview given to Wealthion. His main argument relates to the change in position of traditional finance. For him, this shift has seen real acceleration for nearly a year and a half, with Wall Street’s growing interest in blockchain, tokenized securities, stablecoins and the reconstruction of certain infrastructures on crypto networks.
Lee relies in particular on the positions taken by Vlad Tenev, general manager of Robinhood, and Larry Fink, boss of BlackRock, around the movement of financial assets towards blockchain infrastructures. According to him, this break with the previous fifteen years is linked to the fact that the financial system now considers this technology as a tool. He declares SO : “this is the case now”.
In his analysis, this evolution is based on various transformations already visible in the discourse of large financial institutions:
- Blockchain is no longer just associated with crypto trading;
- Tokenized securities are entering more into Wall Street’s thinking;
- Stablecoins occupy a growing place in new financial uses;
- Crypto infrastructures are envisaged as channels capable of hosting traditional assets.
Lee’s thesis is therefore not based exclusively on an expected increase in prices. It assumes that crypto demand can sustainably rely on broad financial uses, resulting from the integration of blockchain into the functioning of traditional markets.
BitMine strengthens its crypto bet on Ethereum as its target nears
Such conviction is visible in BitMine’s balance sheet. The company purchased an additional 27,180 ETH, bringing its holdings to 5.96 million ETH as of September 13. Thus, this reserve constitutes nearly 4.9% of the 122 million ETH in circulation. BitMine is reportedly about 98% of the way toward its goal of holding 5% of Ethereum’s total supply.
This positioning offers a financial dimension to the scenario defended by Lee. Therefore, tokenization and stablecoins would create demand for uses that go beyond trading and bring blockchains closer to capital markets.
Lee believes that Ethereum is particularly exposed to this change. This conviction is materialized through BitMine’s portfolio, as the company directly commits its balance sheet to the hypothesis of an important role of the network in tokenized finance.
The market cycle supports the thesis, while the CLARITY Act weakens it
The third component of his scenario is cyclical. Thus, Lee believes that much of the leverage that participated in the previous year’s liquidations has been eliminated, leaving a healthier market structure. He also judges that the traditional four-year crypto cycle would approach a low point in the weeks following his remarks.
Actions relating to the sector also feed into his reasoning. Four of the Russell 1000’s 21 best performers in the third quarter may have come from crypto-exposed companies, with BitMine up 99% at the time of the interview.
However, his scenario encounters a political obstacle. Lee had cited the progress of the CLARITY Act among the possible catalysts. However, the US Senate rejected the closure of the debate by 49 votes for and 50 against on September 15, while 60 votes were necessary to take this procedural step.
Also, Lee’s previous bullish projections have not all materialized. Its scenario therefore remains a hypothesis. The coming weeks will reveal whether institutional adoption, cycle dynamics and the growing exposure of traditional markets to cryptos are enough to offset political resistance.
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