“There’s excessive pessimism in the markets,” says Tom Lee of @Fundstrat: cnb.cx/4zeasIb

MAYBE I WAS WRONG ABOUT BLOCKCHAIN TECHNOLOGY I wrote about how I always used to make fun of the guys who said things like "Bitcoin is speculative, but the underlying blockchain technology is interesting." And now I think maybe they kinda had a point.

Ethereum is the home of onchain finance.

Two major pieces of Ethereum news landed today: Deutsche Bank, Germany’s largest bank, is reportedly preparing to offer institutional ETH custody, while JPMorgan, the largest bank in the United States, is bringing JPM Coin’s tokenized dollar deposits to Ethereum. Two giants of traditional finance embracing Ethereum and ETH. But the price barely reacted, whereas on another network, people would be expecting a major pump. There are two reasons for this. First, ETH is larger and more liquid than most competing assets, so it takes more buying pressure to move it. Second, the market already expects major institutions to build on Ethereum. Another announcement is not subverting expectations. Some people might say Ethereum is cursed: success is expected, and it only has something to lose when it disappoints. This is where Ethereum bulls diverge from bears. For years, bulls predicted the adoption now materializing before our eyes. This was NOT consensus. People said institutions would never use Ethereum, or would build everything privately. Now it’s: “That’s already priced in. Good for Ethereum, but how does it accrue value to ETH?” There are two things that mentality ignores. First, this is financial adoption, with size. The players matter, but so do the capital they commit, the assets they tokenize, and how deeply they integrate their products and services. All of that shows growing trust in Ethereum as a financial network, both for people using layer one directly and for layer twos using it for settlement. We are gradually building an internet of finance where the underlying network has one native asset: Ether. ETH secures that system and can be used directly as collateral. Bringing Bitcoin or any other asset, into Ethereum requires additional backing, bridge, or custody arrangements. Native ETH already belongs there. Why does this matter so much? Financial activity settling on Ethereum does not pay Bitcoin’s miners. Bitcoin’s own security model anticipates transaction fees replacing its declining issuance. That activity will not magically show up on Bitcoin just because its proponents expect it to. Second, the uncertainty pushed around ETH’s supply ignores what has actually happened. Since the Merge, ETH’s net supply has grown roughly 1.3% in total, while continuing to reward the stakers securing it. Stakers can earn above supply dilution, with transaction income on top. For an asset used as a store of value, that cannot simply be ignored. There is already actual substance behind ETH’s gradual recognition as a store of value. The network has matured. Proof of stake has years of operation behind it. Current SEC guidance identifies ETH as a digital commodity. The ETFs that critics said would never happen now exist, including BlackRock’s multibillion-dollar fund. Treasury companies like Bitmine and Sharplink are accumulating ETH at scale, and their holdings can produce staking income. That adds another way for investors to gain exposure, and another reason to hold the asset. So when bulls talk about ETH eventually flipping Bitcoin, then gold, this is what they are looking at: an asset with restrained supply growth, native yield, and direct usefulness in a growing financial system. You can disagree with that thesis. But “the price didn’t move” does not answer it. Fundamentals are moving int the right direction, but price is a lagging metric. Many of the things bulls expected are happening. The argument is that ETH is severely underpriced, and that the market still underestimates where it leads.

$ETH turn up was foretold - @DeMarkAnalytics prophecy

Two major pieces of Ethereum news landed today: Deutsche Bank, Germany’s largest bank, is reportedly preparing to offer institutional ETH custody, while JPMorgan, the largest bank in the United States, is bringing JPM Coin’s tokenized dollar deposits to Ethereum. Two giants of traditional finance embracing Ethereum and ETH. But the price barely reacted, whereas on another network, people would be expecting a major pump. There are two reasons for this. First, ETH is larger and more liquid than most competing assets, so it takes more buying pressure to move it. Second, the market already expects major institutions to build on Ethereum. Another announcement is not subverting expectations. Some people might say Ethereum is cursed: success is expected, and it only has something to lose when it disappoints. This is where Ethereum bulls diverge from bears. For years, bulls predicted the adoption now materializing before our eyes. This was NOT consensus. People said institutions would never use Ethereum, or would build everything privately. Now it’s: “That’s already priced in. Good for Ethereum, but how does it accrue value to ETH?” There are two things that mentality ignores. First, this is financial adoption, with size. The players matter, but so do the capital they commit, the assets they tokenize, and how deeply they integrate their products and services. All of that shows growing trust in Ethereum as a financial network, both for people using layer one directly and for layer twos using it for settlement. We are gradually building an internet of finance where the underlying network has one native asset: Ether. ETH secures that system and can be used directly as collateral. Bringing Bitcoin or any other asset, into Ethereum requires additional backing, bridge, or custody arrangements. Native ETH already belongs there. Why does this matter so much? Financial activity settling on Ethereum does not pay Bitcoin’s miners. Bitcoin’s own security model anticipates transaction fees replacing its declining issuance. That activity will not magically show up on Bitcoin just because its proponents expect it to. Second, the uncertainty pushed around ETH’s supply ignores what has actually happened. Since the Merge, ETH’s net supply has grown roughly 1.3% in total, while continuing to reward the stakers securing it. Stakers can earn above supply dilution, with transaction income on top. For an asset used as a store of value, that cannot simply be ignored. There is already actual substance behind ETH’s gradual recognition as a store of value. The network has matured. Proof of stake has years of operation behind it. Current SEC guidance identifies ETH as a digital commodity. The ETFs that critics said would never happen now exist, including BlackRock’s multibillion-dollar fund. Treasury companies like Bitmine and Sharplink are accumulating ETH at scale, and their holdings can produce staking income. That adds another way for investors to gain exposure, and another reason to hold the asset. So when bulls talk about ETH eventually flipping Bitcoin, then gold, this is what they are looking at: an asset with restrained supply growth, native yield, and direct usefulness in a growing financial system. You can disagree with that thesis. But “the price didn’t move” does not answer it. Fundamentals are moving int the right direction, but price is a lagging metric. Many of the things bulls expected are happening. The argument is that ETH is severely underpriced, and that the market still underestimates where it leads.

Tom Lee's Monday Night Macro Minute Video. Tom Lee just used the single greatest TV moment for investor psychology. George Costanza sees a tiny kitchen fire at a kids’ birthday party and screams “FIRE!!!” while shoving women, children, and an old lady out of the way.🔥 Small spark. Maximum panic. @fundstrat @FundstratDirect

Excited to welcome @DavidDuong as Head of US at Ethereum Institutional, based in NYC. David brings 20+ years in institutional markets research, most recently as Global Head of Investment Research at @coinbase, where he led crypto research for the exchange’s institutional clients, covering economic insights, valuation models and market structure. Before that he spent 17 years in sell-side macro strategy at HSBC, Santander and Deutsche Bank, heading Latin America FX strategy and covering EM rates and sovereign debt. He’ll lead our engagement with US institutions as they build on Ethereum. Welcome to the team, David!

BREAKING: Brent crude oil surges to nearly $110, its highest level since September 15, as Iran places its armed forces on the highest alert for 72 hours and mobile bomb shelters being rapidly deployed in Tel Aviv. US oil is now at $100.

Hot inflation. AI credit jitters. A Fed hike back on the table. Is the pessimism overdone? @Fundstrat’s Tom Lee joins @LesliePicker on @CNBCClosingBell today at 3PM ET to break down what it means for stocks into year-end

Gasoline jumped 9.1% in September and accounted for roughly half of the 0.6% CPI increase while rent rose just 0.2% and prices for dairy, meat and medical goods fell. So to me this hot CPI looks more like an energy shock than broad inflation but if higher fuel costs spread into airfares and shipping then the Fed faces a tougher decision at its October meeting with hiring already slowing.

A retired NASA engineer who had worked on the Space Shuttle program for 25 years was hired by SpaceX at age 62. He described the first week as the most disorienting experience of his professional life. At NASA, a design change required 3 meetings, 2 committees, a review board, and 6 to 18 months of documentation. At SpaceX, his new supervisor said "if it works, build it. If it doesn't, change it by Friday." He sat at his desk after the first day and called his wife. He told her he felt like a man who had been swimming with ankle weights for 25 years and someone just cut them off. He could move. He could decide. He could build something in the morning and test it in the afternoon. The constraint that he had accepted as the nature of aerospace engineering turned out to be the nature of bureaucracy. Within 6 months he had contributed to more design iterations than he had completed in his last 5 years at NASA. Not because he was working harder. Because the time between having an idea and testing the idea collapsed from months to hours. The same brain. The same knowledge. A different operating system. He described a specific moment where he proposed a modification to a Raptor engine component. At NASA, the proposal would have entered a queue. At SpaceX, the modification was machined by the end of the day and tested by the following morning. He watched his idea become a physical object in 18 hours. At NASA, 18 hours would not have been enough to schedule the first meeting to discuss whether to schedule a meeting. He told an interviewer: "I didn't get smarter when I went to SpaceX. I got faster. The intelligence was always there. The system was in the way." The difference between SpaceX and NASA is not talent. NASA has extraordinary talent. The difference is the time between a thought and a test. SpaceX compresses it. NASA elongates it. The same engineer produces 10x more at SpaceX than at NASA because the bottleneck was never the engineer. It was the meetings about the meetings about the work.

It has basically never been more idiotic to be bearish on the AI hardware trade than right now