Tom Lee: Ethereum Will Reach 5,500 USD in a Few Weeks, Reaching 12,000 USD by the End of the Year

In an interview on August 26, Fundstrat co-founder Tom Lee made a strong case for the bullish momentum of Ethereum based on policy, arguing that changes in U.S. regulations, the shift to on-chain infrastructure on Wall Street, and institutional demand being channeled through public "crypto treasury" have set the stage for a strong repricing in Q4. "In the short term, you know, ETH will reach $5,500 in the coming weeks," Lee said, adding that by the end of the year, ETH "will be close to $10,000 to $12,000," with much of the cryptocurrency's annual growth typically coming in Q4. 'Moment 1971' of Ethereum The brain behind BitMine's ETH treasury strategy views 2025 as a structural break similar to the dollar's break from gold in 1971. In his view, Washington's stance has shifted from seeing cryptocurrency as a threat to positioning it as a financial leadership tool. "In the past 12 months, there has been a major shift, partly due to the election, when cryptocurrency is no longer seen as the enemy... but truly as part of how the U.S. financial system will gain leadership status," Lee said. He pointed out stablecoins - "a breakthrough product, you know, the GPT conversation moment" - the proposed GENIUS Act and what he calls the SEC's "cryptocurrency project," arguing that these signals indicate that regulators want "Wall Street to use blockchain to truly make America more innovative and actually spread America's financial influence worldwide." Since then, Lee's thesis has focused on Ethereum as the default payment layer for organizations. "Wall Street doesn't want the fastest chain... They want a reliable chain that they can build on. Ethereum has never had any downtime in its entire history. So, for me, that's natural selection." Calling Ethereum a "fat protocol," he argued that value will accumulate at the base layer as payments and encoding move on-chain. Citing the work "from Mosaics and Fundstrat," Lee stated that if the network captures the payment flows and large banks, "you will achieve a network value of $60,000 per ETH" over a period of 10 to 15 years. The Strategy of BitMine A significant part of the conversation focused on the public company he chairs, Bitmine, which he describes as an actively managed Ethereum treasury. Lee compares holding spot ETH to owning a company that uses capital markets to drive up the price of ETH per share. "When Bitmine was established... there was only $4 worth of Ethereum held per share," he said about the base level on July 8. "As of August 24, we currently have $39.84 worth of Ethereum held per share... Therefore, the reason we have a 10 times holding ratio is that Bitmine is actively managing to increase the value of Ethereum held per share of yours by using the capital markets and attracting interest from institutional investors." He argued that this approach could be "anti-dilutive" when implemented at an equity premium to net asset value: "If the price of ETH per share increases, then no capital market is diluted." Lee added that Bitmine has "a multi-billion dollar share buyback program because if the shares become too cheap relative to the amount of ETH the company holds, then a share buyback would make more sense." Regarding strategy, Lee outlined the ambition to control about 5% of staked ETH, affirming the "power law" effect as the importance of the network increases. "If you are a staking entity owning 5%, then you have a positive influence on future upgrades... [and] are one of the most important factors when Wall Street wants to develop on Ethereum," he said. With Ethereum's proof-of-stake mechanism (proof-of-stake), he asserted that the current amount of ETH can generate significant income: "With 9 billion dollars of ETH currently held, that figure is equivalent to about 300 million dollars in net profit." Tom Lee's Macro Perspective Lee affirmed that the demand from institutions is finally shifting towards ETH through managed packaged products and stocks, even as many large allocators still underestimate this currency. "Ethereum is generally still not favored by institutions because most have bet on Bitcoin... that is why Ethereum is perhaps falling into... the most hated bullish phase," he said, while noting that ETH's 35% increase from the beginning of the year has far outpaced Bitcoin's 17%. Lee's macro analysis is not limited to cryptocurrency. He reiterates his positive outlook on stocks, depending on the Federal Reserve easing policy and a growth cycle. "If the Fed takes this action and begins to cut interest rates... and then mortgage rates drop, the ISM index rises, and thus financial stocks really start to participate, I think that’s why the S&P 500 reaches around 6,800 points," he said. While acknowledging that "September is the month when everyone will be worried," he describes any pullback as a buying opportunity: "Since 2022... it has always been a buying opportunity when prices go low."