The Master Investor Podcast with Wilfred Frost

BONUS: Tom Lee pt 2 – How Ethereum Could Overtake Bitcoin
Date: August 29, 2025
Guest: Tom Lee, Co-founder and Head of Research at Fundstrat Global Advisors, Chairman at Bitmine

Brief Overview

In this bonus episode, Wilfred Frost sits down once more with legendary strategist Tom Lee for a deep dive into the future of crypto, focusing on why Ethereum could surpass Bitcoin in network value. Lee unpacks seismic shifts in crypto adoption—from institutional investment in Bitcoin to Wall Street and AI building on Ethereum. The discussion ranges across macro trends, regulatory turning points, and technical distinctions, all with Lee’s trademark clarity and candor.

Key Discussion Points & Insights

1. The Bull Case for Bitcoin

[02:18 – 04:29]

• Bitcoin as Digital Gold:
  • Bitcoin’s main use is as a store of value, likened to digital gold.
  • Institutional adoption is in its early stages (only about 5% have exposure).
  • Supply is capped; 95% of Bitcoin has already been mined—scarcity underpins its value.
  • Governments beginning to view Bitcoin as a strategic reserve.

Notable Quote:

“The Bitcoin blockchain is really one of the best ways to record financial transactions...100% never failed censorship, resistance, never fraudulent entry in its entire operation.”
— Tom Lee [02:49]

• Valuation Potential:
  • If Bitcoin were to match or overtake gold’s $22 trillion value, it could reach $1.2 million per coin.

2. Short- and Long-Term Catalysts for Bitcoin

[04:00 – 05:04]

• Monetary Policy Link:
  • Bitcoin price is strongly correlated with global liquidity (M2 money supply).
  • Fed easing is positive; risk-off environments can dampen price, as with equities.

3. The Case for Ethereum Outgrowing Bitcoin

[05:04 – 10:06]

• Technical Edge – Smart Contracts and EVM:
  • Ethereum originated as a Bitcoin fork, adding smart contracts and programmability (the EVM).
  • Uptime is “100% reliable”—no downtime since inception.
• Wall Street’s New Rails:
  • Wall Street is migrating infrastructure to Ethereum, making it a foundation for tokenized assets.
  • Tom Lee calls this “the 1971 moment,” paralleling the US dollar leaving the gold standard and catalyzing massive financial innovation.
• Stablecoins as Killer App:
  • “Stablecoins became viral, a breakaway product for crypto…that’s like the ChatGPT moment” [06:16]
  • The US “Genius Act” has fueled stablecoin growth, with Treasury projections of a $4T market.
• The “Flippening” Thesis:
  • Ethereum’s role as foundational protocol for tokenization (real estate, banking, AI, etc.) could make its network value far exceed Bitcoin’s.
  • The market opportunity for tokenizing everything is "orders of magnitude larger than gold.”

Notable Quote:

“If gold is a $21 trillion market, tokenizing the real world is orders of magnitude larger than gold, which means Ethereum probably will flip in network value versus Bitcoin.”
— Tom Lee [09:44]

4. Ethereum’s Connection to AI

[07:43 – 08:56]

• Proof-of-Human for Agentic AI:
  • As AI and robotics proliferate, secure on-chain instructions ("proof of human") are vital.
  • Ethereum is poised to be the base layer for these interoperability needs and AI agent systems.

“Now you have to be sure that all the instructions being sent back to the robot are proof of the originator. In other words, you need a token...that interacts across chains. And that’s where AI is going to build on Ethereum.”
— Tom Lee [08:38]

5. Supply Arguments & Crypto Alternatives

[10:06 – 11:56]

• Bitcoin is Store of Value, Ethereum is Utilitarian:
  • Bitcoin’s currency-like nature is centered on scarcity.
  • Ethereum’s value comes from real, recurring use and its burn mechanism via gas fees.
  • Despite the proliferation of altcoins, few achieve meaningful network value.

“Other cryptocurrencies don’t have the network value, because otherwise they’re just software chains.”
— Tom Lee [11:11]

6. Regulation & the Embrace of Crypto

[11:56 – 15:29]

• U.S. Regulatory Pivot:
  • The ‘Genius Act’ signaled broad US adoption, dispelling fears the government would crush crypto.
  • Stablecoins serve US dollar hegemony—now synthetic dollars dominate crypto commerce globally.
  • Stablecoins are an off-ramp for global commerce, already used for large transactions (e.g. Dubai real estate).

“In the crypto world, the dollar is 100% dominant. So the US wants us to financialize into crypto because everybody prefers to get a dollar.”
— Tom Lee [14:06]

• Stablecoins & U.S. Treasuries:
  • The stablecoin industry now collectively holds $280B in Treasuries—projected to become the world’s largest holder as the market grows.

Notable Quotes & Memorable Moments

| Timestamp | Speaker | Quote | |-----------|---------|-------| | 02:49 | Tom Lee | “The Bitcoin blockchain is really one of the best ways to record financial transactions with...never fraudulent entry in its entire operation.” | | 06:16 | Tom Lee | “Stablecoins became viral, a breakaway product for crypto…that’s like the ChatGPT moment.” | | 09:44 | Tom Lee | “If gold is a $21 trillion market, tokenizing the real world is orders of magnitude larger than gold, which means Ethereum probably will flip in network value versus Bitcoin.” | | 08:38 | Tom Lee | “You need a token...that interacts across chains. And that’s where AI is going to build on Ethereum.” | | 14:06 | Tom Lee | “In the crypto world, the dollar is 100% dominant. So the US wants us to financialize into crypto because everybody prefers to get a dollar.” | | 11:11 | Tom Lee | “Other cryptocurrencies don’t have the network value, because otherwise they’re just software chains.” |

Important Segment Timestamps

• [00:00–01:29] — Tom Lee outlines his transition to chairman of Bitmine, an Ethereum treasury company.
• [02:18–04:00] — Bull case for Bitcoin, institutional adoption, supply constraints.
• [05:04–10:06] — Ethereum’s rise: technical features, smart contracts, “1971 moment,” Wall Street.
• [07:43–08:56] — Intersection of AI and Ethereum.
• [11:56–15:29] — Regulatory signals, stablecoins, U.S. treasury integration.
• [10:06–11:56] — Discussion on crypto supply, ETH as technology vs. BTC as money.

Tone and Takeaways

The episode maintains a forward-looking and ambitious tone, with Lee candidly noting the tribalism in crypto but firmly outlining why he believes Ethereum’s utility and integration with finance and AI will eclipse even Bitcoin’s gold-like status.

For listeners:

• Bitcoin remains solid as a value store with upward potential as institutions and governments pile in.
• Ethereum’s utility, programmability, and adoption as a financial and AI backbone could see it “flip” Bitcoin in total value, driven by tokenization of real-world assets and the growth of stablecoins.
• The US’s regulatory embrace of crypto—especially stablecoins—has upended prior bearish arguments about government resistance.