Episode summary
Tom Lee Says It's Still Early | TCAF 205
Ask The Compound
· · Hosts: Josh Brown, Michael Batnick · Guests: Tom Lee
Summary
Tom Lee argued that the market is still early in a bull cycle, not late, because the S&P 500 can absorb repeated macro shocks without breaking trend. He pointed to the fastest inflation spike, the fastest Fed hikes in history, tariff shocks, and even the U.S. bombing of Iran’s nuclear facility as “kill shots” that failed to end the advance. He said waterfall declines are usually V-shaped and that the 2025 drawdown fit the historical pattern of a fast decline followed by a fast rebound.
He also made a broad case that AI is not just a tech story but the main driver of the global economy, with knock-on effects across utilities, financials, industrials, and crypto. In his view, this helps explain why the market’s gains are concentrated in large winners while the rest of the market is more mixed, and why software looks more vulnerable than sectors tied to AI capex. He said financials could rerate higher if banks use stablecoins and other new rails to reduce friction and staffing.
On the macro side, Tom Lee said the ISM below 50, soft labor data, and wide mortgage spreads all point to caution that could reverse if the Fed resumes cutting and policy becomes more stable. He also laid out the Bitmine structure as an equity-financed Ethereum treasury strategy, not a leveraged one, and said the firm bought ETH with institutional capital rather than debt.
Key takeaways
- Tom Lee said the 2025 selloff was a classic waterfall decline and that V-shaped recoveries are the historical norm, not the exception.
- He argued the market is still in an early bull phase because major shocks since 2020 have failed to produce a sustained bear market.
- Tom Lee said AI is the dominant economic theme, with effects reaching utilities, financials, industrials, and the gap between software winners and losers.
- He said the labor market is softer than headline equity strength suggests, and that rate cuts plus narrower mortgage spreads could unleash a housing and refinance recovery.
- On Bitmine, Tom Lee said the Ethereum treasury strategy is financed with equity, not leverage, and therefore is not the kind of structure that would create a margin-call-style blowup.
Notable quotes
“I think that the financial industry could start to be trading like a tech sector multiple”
“AI is converging onto the blockchain to create a crypto token economy”
“So, no leverage. It's cash to buy. cash to buy”
How the episode opens
How was uh Jackson Hole? It was good. I wasn't there for the Fed part.
I was there for the uh alts part. The more traditional crypto part of Jackson Hole. The salt.
Yeah. Oh, so they're doing salt assault Jackson now. It was Salt Wyoming.
Yeah. It was Kraken and Skybridge both sponsoring. How was it?
It was good. They had a lot of policy makers there and you know, so it was a good mix of like people building things and then the policy makers. Very cool.
I heard you on with the Bankless guys. It was good. Yeah, I like those guys.
It was good. They're not as good as you guys, of course. So, we'll talk about obviously Bit Miner later, but is it Bit Min or Bit Miner?
Bit mine. Bit mine immersion. Bit mine immersion.
Yeah. Where did that company come from? Was it did you start it or No, it was an existing uh Bitcoin mining company but it was very small company and it you know mining is not a great business and so they were open to kind of rethinking of their strategy.
So the company uh was open to kind of pivoting to to one focused on Ethereum. So they went they went from a minor to a treasury. Yeah.
So for so they have this originally was their thing was immersion mining. So they have liquid cooled miners but you know mining is a very competitive business because you don't necessarily win a block reward and you have all this capbacks whereas now they're essentially their treasury strategy is holding Ethereum is really asset light for them or capex light right there's almost no capital spending so it's a good pivot for them. I was saying this last week, Tom, are you getting bored of the market?
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- v-shaped recoveries
- ai-driven economy
- stock-picker's market
- jackson hole fed cuts
- ethereum
Companies and tickers mentioned
- PLTR
- Palantir
Watch the episode
Watch “Tom Lee Says It's Still Early | TCAF 205” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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