Podcast Summary: Tom Lee & Arthur Hayes: How Crypto Flips Wall Street

Podcast: Bankless
Date: October 13, 2025
Guests: Tom Lee (Chairman, Bitmine), Arthur Hayes (Creator, Perpetual Swap, Maelstrom)
Host: Bankless

Overview

This in-depth episode dives into how crypto is overtaking traditional finance, with a focus on Ethereum's rapid ascent, the evolving relationship between DeFi and Wall Street, the proliferation of corporate “crypto banks” (DATS), the massive valuation of Tether, and what the future holds for crypto markets. Tom Lee (Bitmine) and Arthur Hayes (Maelstrom) share forecasts, dissect market cycles, and riff on topics from leverage ETFs to the emerging world of financial entertainment in crypto.

Market Outlook & All-Time Highs

00:00–05:03

• Bitcoin and Ethereum Price Targets:

  • Both Tom Lee and Arthur Hayes reaffirm ultra-bullish year-end forecasts, calling for $200,000-$250,000 BTC and $10,000+ ETH by end of 2025.

    "Our target for bitcoin is two hundred to two hundred fifty thousand and for ethereum somewhere between ten and twelve thousand." — Tom Lee [57:51]

• State of the Market:

  • Arthur notes Bitcoin “sucking the oxygen” from the market as it leads, but expects a rotation into altcoins (and ETH) as usual.

    "This is how it usually goes, bitcoin goes first… and then tokens do better." — Arthur Hayes [02:00]

Bitmine, Institutional ETH Accumulation, and Market Structure

05:08–09:50

• Bitmine’s Rapid Growth:

  • Bitmine now holds 2.25% of all ETH, racing toward a 5% target. Lots of momentum, driven by institutional players (esp. Cathie Wood’s ARK).

    "We started the company twelve weeks ago...Bitmine has benefited from a lot of support from the public and from institutional investors." — Tom Lee [05:53]

• Market Dynamics:

  • The combined trading volume of Bitmine and MicroStrategy accounts for 86% of all “crypto DAT” trading [07:24].
  • ETH-focused equities and DATS reinvigorated Ethereum’s narrative and community after a lull.

• Catalysts for ETH’s Surge:

  • Key drivers: friendlier US administration, viral adoption of stablecoins, ETH Foundation’s pivot to being more market-friendly, and Bitmine's role in “cleaning up” the Ethereum narrative.

The Explosion of Crypto DATS & Leveraged Products

09:50–15:06

• DATs Power Law:

  • Top entities like Bitmine/MicroStrategy dominate volume; others struggle.

    "This is...a power law...where the top dogs take the majority... everybody else struggles." — Arthur Hayes [09:50]

• Warning on Leveraged ETFs:

  • Arthur delivers a blunt critique of leverage ETFs.

    "They're absolutely the most dog product ever… just go buy a futures contract if you want leverage..." — Arthur Hayes [11:33]

• Parallels to Wall Street:

  • Traditional bankers capitalize on crypto with new products; $160 million made in DAT fees in one month.

The Crypto Cycle – Is the Four-Year Pattern Dead?

15:06–24:24

• Arthur’s Macro Essay:

  • He systematically reviews all prior “crypto cycles,” showing how US and Chinese monetary policy were crucial, not some magical 4-year rhythm.
  • Argues the current environment is different—cycle will stretch, peaking only when the Trump administration ends (2027-28).

    "I don't think we're in the four year cycle; I think we are in a cycle—it lasts until it lasts." — Arthur Hayes [16:39]

• Tom Lee on Sentiment/Politics:

  • Less exuberance vs. past cycles. Critically, crypto must remain bipartisan to avoid regulation whiplash.

    "Crypto needs to really make overtures to both sides of the political side... we don't want a change administration to result in like a complete flip." — Tom Lee [22:23]

Ethereum as Financial Infrastructure

24:24–34:44

• Bitmine and ETH’s Influence:

  • Bitmine may eventually seek up to 10% of ETH without massive ecosystem disruption, acting as a “structural ballast.”

    "A DAT is essentially a permanent holder of ETH... it provides a lot of ballast to the network." — Tom Lee [25:33]

• Relationship With Ethereum Foundation:

  • Bitmine is actively collaborating with core devs/foundation, aiming to bridge TradFi and DeFi.

    "Ethereum Foundation has been a great organization to dialogue with... us being a large holder of Ethereum has given us a place to be a center point of that conversation." — Tom Lee [27:50]

• Comping ETH:

  • Arthur contends ETH is “the compute asset”, closer to Nvidia or Apple than Bitcoin:

    "I view bitcoin as money and I view ETH as computer..." — Arthur Hayes [32:10]

  • Tom sees ETH and BTC as complementary; compares BTC to digital gold, ETH to the linchpin of future financial rails.

Crypto Is Eating Finance

37:35–43:46

• Finance Becomes Tech:

  • As blockchain/AI replace bank workers, financial multiples could shift from price/book to tech-like P/Es.

    "A JPMorgan built on the blockchain might only need twenty thousand employees... the multiples of banks should change." — Tom Lee [38:37]

• Tether’s $500B Valuation:

  • Both guests agree this makes sense, given Tether’s profitability and global centrality.

    "Tether has been the central bank for crypto... five hundred billion might actually be a bargain." — Tom Lee [42:15]

• Could Tether Tokens Surpass BTC?

  • Both think it's possible, especially if US policy makers encourage global USD stablecoin demand.

    "Of course it is ... that's the goal of the US administration." — Arthur Hayes [44:17]

Wall Street’s Crypto Rush & Governance

45:23–49:30

• Crypto IPO Boom:

  • Wall Street is in a “control F, control R, replace with crypto” mode; any crypto connection spikes company valuations.
  • Security risks in TradFi software may increasingly push institutions to blockchain-based rails.

• On ETH Governance:

  • Bitmine will play a consultative, not controlling, role—a bridge, not a protocol designer.

    "It's better that you know Bitmine have a more consultative view... acting as diplomat... rather than protocol design." — Tom Lee [30:57]

Financial Entertainment, Meme Coins & Prediction Markets

49:30–53:35

• Rise of Financial Entertainment:
  • Meme coin trading and prediction markets like Polymarket are not just “entertainment”—they’re informative for markets and society.
  • Arthur connects the global move towards these platforms to economic hopelessness—most people know speculating is the only path to wealth now.

    "It’s a philosophical indictment on the bankruptness of global governments that people gravitate to trade these things because they have no other option." — Arthur Hayes [53:35]

Perpetuals, TradFi Adoption & Regulatory Friction

53:51–57:02

• Will TradFi Adopt DeFi Native Products?
  • While innovations like perps (perpetual swaps) have shown staying power in crypto, their adoption in US TradFi faces significant regulation and entrenched legacy infrastructure.
  • Arthur: "If any founders are saying I want to bring perps to the US...the battle they have to fight is how are they going to open up the designated clearing organization licenses...[which] have not been awarded in thirty or forty years." [54:57]

Final Price Targets and Future Outlook

57:02–61:46

• 2025 Year-End Targets:

  • Both remain ultra-bullish: $200K–$250K for BTC, $10K–$12K for ETH.
  • Tom believes ETH’s breakout is not a blow-off top, but the start of true price discovery.

• 2026 Wishlist:

  • Tom Lee: Wants Bitmine to complete its 5% ETH holding, see more innovation in tokenized equities and betting markets, and to tokenize specific company value streams (e.g., Nvidia’s China business).

    "We’d see us involved in some specific projects...and see tokenizing a company so we can extract and identify portions of value." — Tom Lee [60:05]

  • Arthur Hayes: Macroeconomic chaos (France leaving the euro, China reflating, Trump at the Fed) plus 24/7 perps on major tech stocks, decentralized synthetics eating into TradFi’s turf.

    "My macro wish list: France leaves the euro, ECB bails out...and 24/7 perps on MAG7 big US tech stocks..." — Arthur Hayes [60:45]

Memorable Quotes & Moments

• On Leverage ETFs:

  "Absolutely the most dog product ever... you just completely eviscerate all your capital." — Arthur Hayes [11:33]

• On Tether’s Business:

  "They're the best bank ever created. They have 150 employees and make ten something billion dollars of net income." — Arthur Hayes [40:09]

• On Global Speculation:

  "Everyone who doesn't own enough financial assets... your salaries ain't gonna cut it. Everybody knows that, intrinsically... so they gravitate towards the stock market or now we have crypto." — Arthur Hayes [51:13]

• On ETH vs. BTC:

  "ETH needs to elevate itself above the rest of the muck down where I play very aggressively." — Arthur Hayes [33:13]

Key Takeaways

• Crypto is rapidly embedding itself in traditional finance, with Ethereum at the forefront.
• Institutional adoption is snowballing, aided by more crypto-friendly US policy and shifting market infrastructure.
• Mega-corporate crypto holders like Bitmine will increasingly shape the direction of DeFi, but seek to play a consultative, not dictatorial, role.
• Markets are entering a new type of extended, policy-driven cycle—not bound to the old four-year crypto halving/boom-and-bust mythos.
• Financialization and tokenization of everything is accelerating, from banks to meme coins to company revenue streams—and Wall Street is all in.
• Despite major warnings about the proliferation of leveraged products and the hollowness of current economic systems, the guests are resolutely bullish on crypto’s next leg up.

This episode is a must-listen for anyone looking to understand how crypto and Wall Street are converging, what’s next for Ethereum, and how speculation, tokenization, and innovation are setting the tone for global finance.