Transcription
Is the pain about to end very soon? Could banks be about to inject trillions of dollars into the system just as Ethereum begins its next major recovery?
Right now, Raul Pal is pointing to a shift that almost no retail investors are watching yet. Instead of relying on central banks to print money the old way, governments are preparing to push liquidity through the banking system itself. That means credit expansion. That means lending growth. And historically, when lending accelerates, risk assets like Bitcoin and Ethereum move first.
At the same time, Tomley believes Ethereum may already be repeating one of the strongest signals it has ever shown at major cycle bottoms. Across eight previous draw downs of 50% or more, Ethereum formed sharp V-shaped recoveries. If that pattern repeats again, he says Ethereum could return toward 5,000 faster than most investors expect.
But what makes this moment even more important is the timing. According to both analysts, artificial intelligence infrastructure spending is forcing governments and banks to unlock trillions in new liquidity and that capital has to go somewhere. In past cycles, shifts like this mark the transition from crypto winter into crypto spring.
In this video, we are going to break down why Raul Pal believes banks are about to become the primary engine of global liquidity, why Tom Lee thinks Ethereum may already be bottoming, and how these signals together could mark the early stages of the next major crypto bull run. And before we jump into it, just a quick reminder, only a small percentage of you watching are actually subscribed. If you're getting value from the videos, hit that subscribe button. It's free, it supports the channel, and you can always change your mind later. Now, let's begin.
This time around I it does feel like there's less levers available. Do you agree? >> No. So they've told you what they're going to do and Steve Mirror made it super clear. >> So they don't want to use the the the central bank balance sheet as much if they can avoid it. >> And the reason being is it's a very blunt tool because it just debases the denominator but doesn't allow for the flow of funds into the economy. And what they've said very clearly and the changes to the ESLR is all about this is you're better off to run it through the banking system and let them provide the liquidity because then it goes it via lending. If you think about the great game being played with AI, there's no way governments can do this. They can't afford it. So it has to come from leverage from the banking system. And that's what's going to happen. And if you look what happened in Japan, they've made exactly the same change. They've started shifting, igniting the banking system, having a steeper yield curve to start allowing lending again because the Japanese banks haven't lend for 30 years, but they're going to start lending again because Japan also knows that with the aging demographics and and all of the issues that are there, the government can't fund what needs to happen because, you know, Japan is kind of the robotic side of the equation and the automation side of the equation. It's going to have to be funded by the private sector. So, there's no way. I mean, we can't just tap the Middle East for cash all the time. They don't have infinite resources either. >> Um, you know, if you think about it, somebody like Mubard have like 300 billion. It's not that much. >> Not in the scale of what's needed here. We need trillions and trillions of dollars.
One of the biggest mistakes investors are making right now is assuming the next liquidity wave has to come from central banks printing money the way they did in past cycles. According to Raul Pal, that is not how this cycle is going to work. Instead, governments are preparing to push liquidity through the banking system itself. And that shift matters more than most people realize.
Changes to leverage rules such as the enhanced supplementary leverage ratio are designed to allow banks to expand lending again. When lending expands, capital starts flowing directly into the real economy instead of sitting trapped inside central bank balance sheets. Historically, that kind of credit expansion has been one of the strongest drivers of risk asset rallies across stocks, technology, and crypto.
This is already beginning to happen globally. Japan has started moving in the same direction after decades of weak lending activity. Policy makers there understand that large-scale artificial intelligence infrastructure cannot be funded by governments alone. It requires private sector credit expansion measured in trillions.
And the scale here is the key detail. Artificial intelligence, data centers, semiconductor supply chains, robotics deployment, and automation upgrades all require massive capital investment. Sovereign wealth funds alone cannot finance it. Even the largest funds in the Middle East only control hundreds of billion. The next phase requires banking systems to step in.
When banks begin expanding credit, liquidity spreads faster and deeper through markets than traditional stimulus programs. That environment has historically supported strong moves in Bitcoin and Ethereum because both assets respond early to expanding financial conditions. What makes this moment especially important is that this liquidity shift is happening. At the same time, artificial intelligence begins reshaping global productivity expectations. And that combination is setting the stage for what could become the next major rotation into digital assets.
What is happening with AI is really interesting because again we've still got these two schools of thought. There's those of us who kind of live on X all day and are like, "Oh my god, >> and then there's your real friends outside of this world." >> They're still on the free version of chat GPT and they're just like at >> best. Yeah. >> At best. I mean, and they and you're like this. >> That's one of the biggest disconnects I've ever seen. >> You sit down with a bunch of people in our world and everyone's like wide eyes. Holy this thing's alive. and they sit with your friends and they're like, "Oh, it just tells lies. I don't even bother using it." You're like, "Oh my god." >> So, I think I think there's a lot of adoption that still needs to happen. Even though this has been the fastest adoption technology ever, >> some of it is not really true. It's like Microsoft Copilot, which is awful and nobody uses. >> Yeah. >> You kind of pretend. And, you know, to say that Gemini has all these users when they've basically forced it into the search engine. Uh, so it's not as big yet, but productivity is going to change forever. Right now, I'm not sure how productive we all are because I spent even more time than I've ever done. >> Make make 50 dashboards and I'm like, okay, wait, what is this actually doing for me? Like, at least I learned a lot. But yeah. >> Yeah. And most of the dashboards, you know, anyway, like you're breaking new ground. I built myself a liquidity dashboard and blah blah blah. Exactly. >> I actually know this stuff, >> but it makes I feel really good. >> Yeah. Yeah.
One of the most powerful signals that a major crypto expansion cycle may still be ahead comes from something most investors are overlooking right now. Artificial intelligence adoption still feels early outside of technology circles even though headlines make it seem like the transformation is already complete. Raul Pal points out there is a massive gap between people working close to artificial intelligence and the general public using it casually.
Many investors assume adoption is already saturated because they see tools everywhere online. But when you look closer, most businesses are still experimenting rather than deploying artificial intelligence at scale. That matters because real productivity revolutions do not begin when technology appears. They begin when companies restructure around it.
This pattern has repeated before. The internet existed for years before it transformed commerce. Smartphones existed before they reshaped entire industries. Artificial intelligence is now entering that same phase where early infrastructure spending starts accelerating faster than public awareness. And that infrastructure requires enormous capital investment.
Cloud providers are expanding data center capacity across North America, Europe, and Asia. Semiconductor demand continues rising as artificial intelligence training systems grow larger. Governments are supporting domestic chip production and automation upgrades because they see artificial intelligence as a national competitiveness priority. All of this creates a powerful liquidity engine moving through the financial system at exactly the moment banks are beginning to expand lending again.
That combination matters for crypto because digital assets historically move early when productivity technology shifts reshape capital flows. When investors begin pricing in faster economic growth and stronger innovation cycles, liquidity tends to rotate outward along the risk curve. And if artificial intelligence adoption is still earlier than most people believe, then the capital rotation supporting the next crypto expansion may still be in its opening phase.
This becomes even more important once we look at what Tom Lee says about Ethereum's historical recovery behavior after major drawdowns. And if you want to stay ahead of these signals and know exactly when the market's heating up or when it's giving you those rare buying windows, I break it down every day in the Crypto Nutshell, my free 5-minute daily crypto newsletter. It's built to give you quick, actionable insights so you can make smarter decisions without spending hours buried in charts or headlines. You'll get clear signals on when to buy, when to take profits, and the latest news that could move markets, all delivered straight to your inbox. Just click the first link in the description, enter your email, and you're in.
>> Well, historically, Ethereum bottoms are V-shaped, and that's something that our company is positioned for. Bit mine. What I've put together is I've marked the last eight times Ethereum fell around 50% or more. Okay? So, you can see they're all clustered. In fact, in the last few years, there are three clusters of 50% declines. In fact, last year, which people forget, Ethereum fell 64%. From January to March, so it had another mini crypto winner last year. Well, each of those seven previous Ethereum declines all had a V-shaped bottom. So that means if we have a V-shaped bottom in 2026, we may return to 5,000 sometime this year. And that would be our expectation. It took us roughly 4 months to fall from 5,000 to,800. It will take us less than 5 months to recover that decline. Okay. So finally, keep in mind you don't necessarily want good news to happen. markets bottom on bad news. So, what you want to have happen is something comes out uh that makes you think Ethereum is in trouble, but Ethereum's price goes up. For instance, you know, today the Ethereum Foundation put out a sort of their new position paper. It's not quite anti-institution, but they're focusing on uh what they call the core, you know, the core identity of Ethereum. Many people thought that was anti-institution, but yet Ethereum actually rallied today.
According to Tom Lee, Ethereum has shown a remarkably consistent pattern after major draw downs. And that pattern is something long-term investors should pay close attention to right now. Across the last eight major declines of roughly 50% or more, Ethereum formed sharp V-shaped recoveries instead of slow grinding bottoms. These were not weak rebounds. They were fast reversals that caught investors offguard because sentiment remained negative even as price momentum quietly shifted higher.
That setup may be repeating again. Tom Lee points out that Ethereum previously fell about 64% within a short window during a prior reset phase. Yet each earlier decline of similar size eventually reversed quickly. If this cycle follows the same structure, the recovery toward 5,000 could happen faster than many investors expect once momentum begins to return.
What makes this signal especially important today is the psychology surrounding the market. Historically, major bottoms do not appear when headlines feel positive. They appear when investors still believe the environment is fragile, but price stops falling anyway. That exact dynamic has started appearing again recently. Even developments that some traders interpreted as negative for institutional participation did not push Ethereum lower. Instead, price strength held steady when markets stop reacting to bearish narratives that often signals a shift beneath the surface.
At the same time, institutional infrastructure around Ethereum continues expanding through stable coin settlement growth and tokenization activity moving onto public blockchain. These structural developments rarely align with long-lasting bare markets. And when historical recovery patterns begin lining up with improving institutional demand, investors start looking for confirmation that a true cycle bottom may already be forming. That confirmation becomes even stronger once we examine the technical signals suggesting Ethereum may already be exiting the crypto winter altogether.
>> Bitmine works with an adviser named Tom Demar. uh he's a legendary market timer and he's provided uh an analysis to us that says Ethereum in the last few months, especially since October, is really mirroring what happened to the S&P 500 in 2011 and what happened to the S&P 500 in 1987. if you um were invol involved in US markets both times marked major declines in the S&P well according to him there's a 93% correlation to what Ethereum is doing today to what the S&P did in 1987 And if we're correlating this to the 2011 episode, Ethereum is bottoming today. So, uh, using his analysis, we think we're at the bottom or exiting the crypto winter now. And another way to think of it is this measure called realized price. It's very popular with using doing the same math for Bitcoin, but we're doing it for Ethereum. Realized price is looking at the blockchain and looking at the average purchase price of Ethereum. So, currently on the Ethereum blockchain, the average purchase price is $2,241 for Ethereum. And if we look at the two lows, the two most recent lows in 2022 and last year, Ethereum traded at a 39% discount to the realized price in 2022 and a 21% discount in 2025. In other words, your average position was in a loss of 21%. Currently, we're at 22%. So, we're at the level where in 2025, Ethereum started to turn higher.
Tom Lee explains that analysis from Tom Demar shows Ethereum recently began mirroring patterns seen during two historic recovery moments in the United States stock market. Those moments happened after the 1987 crash and during the 2011 correction period. Both were environments where fear dominated headlines, yet markets quietly formed durable bottoms before moving higher again.
According to this comparison, Ethereum's recent structure closely resembles those earlier recovery setups with a correlation measured at roughly 93%. If that relationship continues to hold, it suggests Ethereum may already be exiting the crypto winter phase rather than entering a deeper downturn.
Another signal supporting this view comes from something called realized price. This metric looks at the average purchase cost across the entire Ethereum network. Historically, when Ethereum trades at a meaningful discount to this level, long-term investors begin accumulating aggressively. In the 2022 cycle low, Ethereum traded about 39% below realized price before reversing higher. During the 2025 reset phase, the discount reached about 21% before the next recovery started. Today, Ethereum is again trading near that same discount zone.
When multiple historical signals begin aligning at once, investors start paying attention because these environments often appear near turning points rather than near top. What makes this setup even more powerful is that it is happening at the same time global liquidity conditions are beginning to improve again as banks prepare to expand lending into the real economy. And when technical bottoming signals start aligning with a new liquidity cycle, markets often move faster than most investors expect. That is why the next phase of this cycle may not just be a recovery. It could become the beginning of crypto spring.
When several independent signals begin pointing in the same direction at the same time, markets often move before the majority of investors are ready. Right now, that alignment is beginning to appear across liquidity conditions, artificial intelligence, investment cycles, and Ethereum's historical recovery structure. Raul Pal's argument that banks are preparing to expand lending is not happening in isolation.
Across major economies, governments are encouraging private sector credit growth because the next wave of infrastructure spending cannot be funded through traditional public balance sheets alone. artificial intelligence, data centers, robotics deployment, semiconductor production, and energy upgrades all require trillions in financing. When banks begin supporting that expansion, liquidity spreads directly into markets that historically benefit early from improving financial conditions.
At the same time, recent business cycle indicators have started turning more constructive again. Manufacturing surveys that spent extended periods below expansion territory have begun stabilizing and improving in recent weeks. That kind of shift matters because improving activity expectations often lead capital to rotate outward along the risk curve toward technology and digital assets before the broader economy fully reflects the change.
Ethereum's repeated V-shaped recovery history adds another layer to this setup. When technical structures begin aligning with improving liquidity conditions, investors start watching for the transition from late crypto winter into early crypto spring. In past cycles, those transitions did not feel obvious at the time. They only look clear after prices had already moved significantly higher.
Institutional infrastructure is also expanding at the same moment. Stable coin settlement volumes continue growing. Tokenization activity across financial markets is accelerating and regulated access through spot bitcoin ETFs has already introduced a new class of long-term capital into the ecosystem. These structural developments rarely appear during prolonged downturn phases.
When liquidity expansion, productivity investment cycles, and historical recovery patterns begin reinforcing each other, markets often enter the early stages of their strongest moves. And if this alignment continues developing through 2026, what we are seeing now may not be the end of a difficult period. It may be the beginning of the next major crypto expansion cycle.
Anyway guys, that's all we have for today. Thanks for watching and I'll see you all in the next video.