Key Takeaways:

• AI is not a bubble, valuations are still cheap.
• Corporate profits are hitting record highs, supported by labor shortages and increased productivity.
• Traditional valuation models are outdated.
• Bitcoin's ultimate valuation is between $1.6 million and $2 million.
• Ethereum will become Wall Street's "sovereign reserve asset."
• Prediction markets are more accurate than traditional economic surveys.
• A "robot tax" will be implemented in the future.
• The current bull market is the "most hated bull market."
• Retail investors are outperforming Wall Street institutions.
• Fundamentals are returning to dominance, and macroeconomic influences are waning.
• AI robots are at the core of the productivity revolution.
• US inflation data is "contaminated."
• On-chain financial infrastructure is rapidly taking shape.
• The market will enter a phase of accelerated growth in 2026.

AI: Is it a Bubble?

Tom Lee argues that AI is not a bubble in the traditional sense. Despite concerns about over-investment, returns are beginning to materialize. He points out that valuations for companies like Nvidia are relatively low compared to other companies, suggesting that the market has not yet reached the bubble stage.

Outdated Valuation Models vs. New Realities

Lee argues that traditional valuation models are outdated due to structural changes in the economy. He suggests that the price-to-earnings ratio (P/E) should be higher than historical averages given strong earnings growth and the current economic environment.

The Future of Bitcoin and Ethereum

Lee predicts that Bitcoin will eventually reach a price of $1.6 million to $2 million. He also believes that Ethereum will become Wall Street's "sovereign reserve asset," with a target price of $21,000.

Prediction Markets vs. Traditional Surveys

Lee criticizes traditional economic surveys, such as the University of Michigan consumer survey, arguing that they have become inaccurate due to political biases in the samples. He suggests that prediction markets, such as Trueflation and PolyMarket, offer more accurate and transparent forecasts.

Robot Tax and the Shift in Taxation

Lee anticipates that governments will eventually implement a "robot tax" to compensate for the loss of tax revenue due to automation. He suggests that every action of a robot be tracked on-chain, and taxes will be paid through micro-payments.

Outlook for 2026

Lee expects the market to experience accelerated growth in 2026, driven by accommodative monetary policy, a manufacturing rebound, the adoption of AI technologies, and the tokenization of diverse assets.