Cathie Wood vs Tom Lee 🔥Ethereum Mega-Supercycle🚀

Episode Transcript
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Speaker 1 (00:00):
Let's get into it today.

Speaker 2 (00:01):
This is Tom Lee versus Kathy Wood on Bitcoin versus Eth.
We'll break it down for you. Let's just jump right
into the show. And of course I want to thank
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(00:21):
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use that link down below to get started. Let's go
over to a couple of tweets and I've got a
lot of clips for you guys today. I just want
to go right to this tweet right here, and this,
of course is Kathy Wood leading the twenty twenty five

(00:44):
Q one and Q two Investor performance ranking, holding the
number one spot both in Q one and Q two.
But if you compare this over here to the super
Investor performance for twenty five, you've got Tom Lee holding
number four and Kathy holding number five. So it's a
I think it's a good, you know, comparison between the two.

(01:04):
They have different strategies in different ways of doing things,
and they also have different camps in where they invest in.
I want to go to this first clip because this
will get into setting this up around bitcoin and ethereum.

Speaker 1 (01:16):
Take a look.

Speaker 3 (01:18):
You think that the Ethereum market cap is going to
flip with bitcoin flipping, as they might say, we have
in twenty thirty a forecast and we expect to hit
twenty five trillion dollars in twenty thirty, the vast majority
of that in bitcoin. I'd love to hear your thoughts

(01:42):
on why eath will surpass bitcoin.

Speaker 4 (01:45):
Okay, gold is five percent of all available assets dollar
dominance is going to be the opportunity of Ethereum in
that world. We believe Ethereum could flip Bitcoin similar to
how Wall Street and Equity flipped goals.

Speaker 2 (02:01):
Tom there of course defending obviously bitmin, which is BM
and R.

Speaker 1 (02:05):
That's the ticker for what he's behind.

Speaker 2 (02:07):
And this is one of the biggest digital asset treasury
companies out there, well, the number one in terms of
eth so he's got a little bit of a stock
in this play, for sure. But if you look at
this based on the price of eth with a market
cap of bitcoin, this is where it would be around
eighteen k and and this is not too far away.
It's the four x five esque almost. Tom has talked

(02:29):
about this before anywhere between fifteen to a twenty k eth.
He is that far into understanding where he thinks the
future could go. Now, this would mean that Bitcoin would
have to somewhat stay still, but there would be a
certain amount of rotation of assets. And his reference there
between gold and what we're dealing with the S and
P is an interesting one for sure. Let me go
to this second clip here. This is Tom Lee explaining

(02:52):
why he thinks that bitmin is going to be the
one to bet on, and Kathy kind of comes back
with a very intriguing statement here. It's almost like she
doesn't really know what he's talking about and that they
weren't really prepared for it.

Speaker 1 (03:05):
Take a look what they had.

Speaker 4 (03:06):
To say, since you know, bitmine is I think the
four hundred and seventieth largest company in America, you know,
because we'll announce Steak our staking solution very soon. But
assuming at two point seventy nine percent yield on a
pretext and income basis, It's like the eight hundred most
profitable company in America Bitmin and micro Strategy will soon
be Russell one thousand constituents. So that opens up to

(03:27):
passive index flows. Seventeen hundred large cat managers now have
to make a decision on whether to overweight underweight the
four hundred and eightieth largest company in America Bitmine. I
think could actually have accelerating flows next year.

Speaker 3 (03:44):
The idea that that indexation is going to be a
phenomenon here is mind blowing to me.

Speaker 4 (03:51):
The passive index flow is why micro Strategy has held
onto It's a portion of its nav premium.

Speaker 3 (03:58):
We don't pay attention to index so I've never thought
about this.

Speaker 2 (04:03):
All right, So when you look at this right here,
there's our investment. This was their original investment in micro Strategy.
That was their approximate percentage of total shares that outstanding
at the time. But she was holding MicroStrategy without understanding
the endexation of what Tom was just explaining. So a
very very interesting position, I think for Kathy Wood, especially
as one of the best investors out there. Now, I

(04:24):
want to go to this next clip, because this is
where Tom goes into the whole idea around proof of
work versus proof of steak.

Speaker 1 (04:31):
You want to watch this, take a look.

Speaker 3 (04:33):
There will come a time where we're in some kind
of crisis the benefits of proof of work relative to
proof of state. A crisis will be a moment of
self reflection and like, all right, is there a real
difference between this proof of work world and this proof
of steak world.

Speaker 4 (04:53):
It's I think going to happen with proof of work
because we know Bitcoin mining, for instance, is becoming constant
treated in corporate I think this year there was one
mining operation that had won six successive block rewards, which
is a high level of concentration. The block reward is
going to be so small that it may not provide

(05:15):
the economic incentives to actually continue mining, which would represent
greater concentration.

Speaker 2 (05:21):
All right, So I guess that was a little bit
of a slam dunk there on on Kathy in reference
around mining and proof of work versus proof of STEGA.
And then of course you know it's out there, listen,
this is what's happening out there in xLand often and
maybe she just didn't understand it. And this is a
good example of that.

Speaker 1 (05:37):
This tweet right.

Speaker 2 (05:38):
Here, Bitcoin is much faster than your favorite all coin
and of course you can kind of see that's the
lightning network right there. But unfortunately, this of course was
community noted and it says bitcoins base layer is only
capable of roughly seven transactions per second on TPS. Just
as a reminder, guys, this is the kind of thing
that I think gets lost a lot in terms of

(05:59):
how this actually performs as a blockchain as a speculative asset.
Great one, but a very interesting point that Tom was making.
And remember Steak and Shake, they just deployed bitcoin. I
still think that was a great marketing employ for them.
But here is what they had to say about this.
This is a Steak and Shake. Take a look.

Speaker 5 (06:18):
Steak and Shake has brought bitcoin into the presence. About
one out of every five hundred Bitcoin transactions globally happened
at Steak and Shake. If you're an engineer, we'd love
to chat with you. It's only like three engineers four okay,

(06:40):
there's a there's more than three. Okay, that's good.

Speaker 1 (06:47):
I don't know.

Speaker 2 (06:48):
Sometimes you can't make this stuff up, so I won't
just play it here, of course is another point you
have to look at. New data confirms Ethereum is the
number one ecosystem for new develop plopers. This is in
twenty twenty five. You can kind of see a sixteen
thousand holding their own Salona coming in Bitcoin holding in
at seventy five hundred, Polygon growing, even Swie and even

(07:11):
stacks up there as well, So pretty consistent. But the
point being eth is the top dog in terms of
ecosystems and developers, and this is only going to accelerate
from here, so it is really just waiting in the
wings to become this next disruption level. This next clip
gets into where Kathy is saying, well, what if it

(07:31):
does get disrupted by banks?

Speaker 3 (07:34):
Take a look what could disturb that knock bitmine off
the perch, Solana.

Speaker 6 (07:40):
Making a go. It does happen from time to time.

Speaker 4 (07:45):
You know, if you were to look at where the
development is today, especially L two's announced, even including like
Swift building on linear, Ethereum has already won the discount
to the future.

Speaker 3 (07:56):
And what do you think of ARC the layer one
that circle put in place for financials.

Speaker 4 (08:02):
If some bank created a layer one blockchain and they're
the oracle. We know that they're tilting that in their favor,
and the security model becomes a question, and we know
there's so many high profile hacks that have taken place
because as you know, that is one of the prominent
features of etherorum, that it's an entire history. Resilience was

(08:22):
an existing feature and has never had any downtime. Think
about tokenized world and using prediction markets. A lot of
that thinking is taking place around building on layer ones
and layer twos on etherium.

Speaker 2 (08:33):
So that is a big factor. Now she goes on
in the interview to kind of challenge the idea of
L twos that could just be stealing a little bit
of the activity and the fame of ethereum. Look what
you had to say here.

Speaker 3 (08:46):
You know it's the layer twos that are collecting all
the fees. The network activity is falling giving way to
the layer twos.

Speaker 6 (08:54):
But what about that issue.

Speaker 4 (08:56):
Quote world where the L two's pays zero gas feed
okay to the L one, which is not true. The
fact that ethereum is the monetary base would actually crew
value to it. Imagine someone said in video trades in America,
it doesn't help the dollar, infect it helps the euro
we'd be like what And of course in the future,

(09:18):
any bank that is going to be building on the
future of ethereum is going to be staking ethereum as well.

Speaker 2 (09:24):
Yeah, so then you're getting into, i think, a whole
new model, and that I think is the value that
what Thoma is trying to represent around eth Now, I
want to revisit what he was talking about earlier in
that clip around tokenization and market efficiencies via these prediction markets,
because this gets into a new angle in how the
markets might work.

Speaker 1 (09:45):
This is a very good clip. Take a look.

Speaker 4 (09:47):
The real value on the unlock of a tokenized in
video is that we can do a factor bet. We
can then see what's priced in for their Blackwell chip
sales or their China sales, because now you take in
these and you've broken it into tokenized components, and then
you can use a prediction market to hedge yourself. So

(10:07):
Nvidia now knows what's priced in for its black Web
chip sales and they can therefore work with a lot less. Hey,
what's priced in our stock? They know exactly what's priced in.
Polymarket got fifty out of fifty states, right, so they
prove themselves that's probably a better way to model earnings
than to wait every ninety days for a company and

(10:29):
have the CFO tied up for a month auditing financials.

Speaker 6 (10:32):
You know, this is music to our ears. Will actually
allow the equity market to be more future looking than
it currently is. Yes, no question about it.

Speaker 2 (10:42):
It's interesting she says, no question about it. She's all
in on this, But does she realize Polymarket is engaged
in this through Polygon. Polygon is an L two for ethereum,
and this is the whole point. It changes the whole
dynamic around how markets are going to work. That's why
I think Polygon and poly market in comparison. Even if

(11:03):
you look at Calshi and what they're trying to do
over there, these are the future of where these markets
are going. So it's interesting that Kathy is not picking
this up.

Speaker 1 (11:11):
Now.

Speaker 2 (11:12):
This is another clip that I want to play, and
this is Sandy who's CEO, I guess, founder originator of Polygon.
He was on NASDAC and he talks about these upgrades
and why they are so important, especially poly market.

Speaker 1 (11:24):
Take a look.

Speaker 7 (11:25):
We are super proud that polymarket has come here. It's
a big thing for the entire crypta space. Specifically, Polymarket
is fully built on Polygon. It's built on Polygon blockchain.
We have now now gone to the capacity to have
five thousand TPS, which helps applications like polymarket to scale
their user base to hundreds of thousands or millions of users. Right,

(11:45):
so now the gas piece becomes even cheaper. So this
upgrade is extremely pivotal for us, for us to go
to one hundred thousand TPS, which allows us to go
to visa our MasterCard level throughout so that like multiple
parties across the globe can use this platform for payments
and stable coin and tokenization, whether you are on x

(12:06):
or you are on Telegram, if they're using a Stripe
in the background. The subscription, the monthly subscription that you do,
that now you can do with stable coins on Stripe,
and all of that gets processed on Polygon, all right.

Speaker 2 (12:18):
And just remember Stripe did do a big announcement this
week in reference to subscriptions being able to pay with
crypto and stable coins, and that's kind of where san
Deep is going. But really, when you look at this,
the opportunity is pretty large, and what Tom Lee is
trying to represent is what he's doing. Obviously, with the
Treasure Company, but also in general with Ethereum is really

(12:41):
taking a look at the total TAM and this is
an important factor when you really kind of consider where
the future is going. Take a look what he had
to say about total market size.

Speaker 4 (12:52):
I don't think one blockchain can hold the entire financial system. Anyways.
Let's say your twenty seven joint is correct, and I
believe it is even conservative. Today global GDP's eighty trillion plus.
We know that as you tookenize loyalty and IP things
that are GDP measurements, but not financial markets also on
the blockchain. So maybe the total what ends up on

(13:13):
the blockchain is sixty plus twenty eighty trillion market versus
your twenty seven trillion. Twenty seven trillion seems very reasonable.
I mean, maybe low that cannot fit on one ledger.

Speaker 2 (13:23):
So from that you can kind of get what Tom
Lee is talking about. Kathy Wood looking in a word,
between the twenty five twenty seven trillion in terms of
addressable market, But what he's looking at is a much
broader base. And I think even though we may see
multichain world and I think we will the fact that
this could be considerably higher possibly magnitude level is pretty

(13:44):
significant around the future of ethereum. So all of that
being said, there's one more thing that happens when all
of this starts to come together, and that is going
to be staking.

Speaker 1 (13:54):
Here's a clip that talks about that.

Speaker 3 (13:56):
And we were having trouble gaining access to ETH for
our ETFs. SECD does not yet allow staking, and we
tried to gain access through other Canadian ETFs which do
allow staking, but then we were becoming way too big
a percentage of those and we were also subjecting the

(14:19):
funds to the risks of bad income. You came along
at the time we were trying to figure this out
and provided a solution.

Speaker 6 (14:28):
You really did solve a problem.

Speaker 4 (14:30):
Yeah, well, thank you for also investing in bitmin.

Speaker 2 (14:35):
I like that the investing in bitmine because this is
exactly the case, and we're going to see staking.

Speaker 1 (14:40):
It's going to happen.

Speaker 2 (14:41):
Most likely we'll start to see this across a lot
of different financial institution and of course ETH will be
a big winner of this. Here was Arkham kind of
breaking this news. This is a Canadian ETF that just
staked one hundred and thirty million Etfs's kind of what
she's referencing there, and they hold six hundred and twenty
million of eth right now. And this is in just
one ETF in Canada. So imagine what this is going

(15:03):
to look like here in the US. Imagine what this
is gonna look like as we see traditional finance start
to move into the staking world.

Speaker 1 (15:09):
Guys, this will be huge.

Speaker 2 (15:11):
So we're gonna do more breakdowns like this for you.
If you like them and you want to jump into
our own club, you can do that in the Diamond Circle.
Just click the link down below.

Speaker 1 (15:20):
It's absolutely free.

Speaker 2 (15:21):
Check it out. Of course, follow me out there on
X at Paul Baron. We'll catch you next time right
here on The Paul Baron Show

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Cathie Wood vs Tom Lee 🔥Ethereum Mega-Supercycle🚀

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