The crypto bear market is likely over with the argument that a new cycle driven by tokenization and AI-powered financial services is starting to take shape, said Tom Lee, chairman of Bitmine (BMNR) and co-founder of Fundstrat.
Speaking at Consensus 2026 in Miami on Thursday, Lee pointed to bitcoins recent strength as a historic signal that the market is leaving the downtrend that saw prices crater from $126,000 in October to $60,000 in February.
After positive monthly returns in March and April, BTC has so far risen by approx. 5% in May, which would be the third consecutive positive monthly return.
“You’ve never been in a bear market if bitcoin closes for three consecutive months,” Lee said. “If bitcoin closes above $76,000 this month, the bear market is definitely over.”
The CoinDesk Bitcoin Price Index closed April at $76,300, while the asset is currently trading just below $80,000.
Lee said investors remain psychologically anchored to the last crypto downturn and are underestimating the strength of the current recovery. He also pointed to bullish technical signals from veteran trader John Bollinger, who recently said his trend models had turned positive on bitcoin.
Adding to the bullish narrative, Lee noted that software stocks — a sector hit by concerns about AI disrupting its business model and Fundstrat recently upgraded — have historically traded in close correlation with bitcoin. Since tensions escalated between the US and Iran, Lee added, cryptoassets have outperformed most traditional markets, with ether (ETH) leading gains.
Tokenization and AI agents run the next cycle
The next bull market in crypto is two megatrends disrupting the financial sector: all assets migrating on-chain, called tokenization, and artificial intelligence (AI) agents using blockchain rails.
Lee argued that AI agents will need money to move value autonomously, and for that they will increasingly rely on blockchain networks and tokenized financial systems.
He pointed to stablecoin adoption as evidence that the transition is already underway. Stablecoin transaction volume has already surpassed Visa payments, he said, pointing to Grayscale’s report that the $300 trillion securities market will eventually migrate to blockchain rails as tokenized assets.
“The networks that host a large portion of tokenized activity will capture the economic value,” Lee said.
That shift could radically reshape the financial economy itself, he argued. Lee compared JPMorgan — expected to make about $60 billion this year with 300,000 employees — to firms like stablecoin issuer Tether and trading giant Jane Street, which generates similar levels of profit with just a fraction of the workforce.
“Native digital companies using blockchain as settlement eliminate a lot of processes and people,” he said.
In Lee’s view, crypto-native financial companies could increasingly resemble the Internet companies that supplanted legacy media and telecom giants over the past two decades.
“In 10 years, half of the largest financial institutions in the world will be digital natives,” he said.
