Tom Lee praised Ethereum as the 'largest macro trade', which could reach new highs in the short term.

Wall Street strategist and Fundstrat's Chief Investment Officer, Tom Lee, recently made the bold prediction that Ethereum (ETH) could hit $5,500 in the short term and even reach $12,000 before the end of this year.

In an interview with Mario Nawfal, Lee also emphasized that the current bull market cycle for the crypto market could last until 2035 – an ambitious prospect for the entire blockchain industry.

Ethereum – "The largest macro transaction"

According to Lee, Ethereum is not just a cryptocurrency or a simple blockchain platform. He views ETH as "the largest macro transaction of this decade," as it brings together all the elements needed to become the pivot of the entire global financial and technological system in the upcoming period.

Stablecoin – A bridge between traditional finance and blockchain

Stablecoins are rapidly developing with a total market capitalization of hundreds of billions USD, serving as the "digital USD" in the blockchain ecosystem. They not only facilitate transactions in DeFi but are also increasingly being integrated into traditional financial applications, cross-border payments, and corporate liquidity management.

Ethereum is the backbone infrastructure for most stablecoins today (USDT, USDC, DAI), thereby affirming its central position in linking traditional financial markets with the decentralized digital economy.

Project Crypto – "Wall Street on the blockchain"

Tom Lee referred to "Project Crypto" as a long-term strategy to reshape the global financial infrastructure on the blockchain. If Bitcoin is considered "digital gold", then Ethereum could become the "digital capital market", where every financial product – from bonds, stocks, derivatives, ETFs to investment funds – can be tokenized and traded instantaneously, transparently, and cross-border.

This means that Ethereum not only supports DeFi, but also has the potential to stand on par with traditional financial centers such as Wall Street or the London Stock Exchange, while operating on a more decentralized, efficient, and globalized platform.

Artificial Intelligence (AI) – Blockchain is the "data validation layer"

Lee particularly emphasized the connection between AI and blockchain. In the context of AI and robots increasingly generating enormous volumes of data, the need for verification, storage, and proof of transparency becomes an urgent problem.

Ethereum, with the development of Zero-Knowledge Proofs (ZKP), can take on this role. ZKP allows for the verification of data without revealing detailed information, thus ensuring both privacy and maintaining reliability. When AI needs a platform to "prove the truth" in the world of data, blockchain – specifically Ethereum – will become the operating system of trust.

From these three driving forces, Tom Lee believes that Ethereum has the opportunity to become the core infrastructure platform for both global finance and artificial intelligence. While Bitcoin reshapes the way people store value, Ethereum has the potential to restructure the entire economic and technological system.

"All the aforementioned catalysts will only further highlight the role of Ethereum – the most reliable smart contract infrastructure for the new era of finance and technology," Lee emphasized.

In other words, Ethereum is not just an asset for investment, but also the "macro infrastructure" of the future – where finance, data, and AI converge.

The investment frenzy into ETH

Tom Lee's optimistic forecasts not only create a media effect but also drive large-scale capital inflows into Ethereum from both the ETF market and traditional financial institutions.

In the United States, spot Ethereum ETFs have quickly become the focal investment product. Within just two months of launching, these funds attracted nearly 10 billion USD in net inflows, a remarkable figure compared to the initial growth rate of Bitcoin ETFs in the past.

This strong capital flow shows that institutional investors increasingly view ETH as a highly liquid asset that is easily accessible and compliant with the current legal framework, thereby opening up a mainstream investment channel for millions of traditional investors who are wary of the risks of directly holding crypto.

Alongside ETFs, large enterprises and corporations are also gradually incorporating ETH into their treasury. According to the latest data, these institutions currently hold about 3.7% of the total supply of Ethereum, equivalent to nearly 19 billion USD at market price.

Source: Strategic ETH reserveThis move reflects a fundamental shift: ETH is no longer viewed merely as a short term speculative asset, but is gradually being placed on par with Bitcoin in the strategic reserve portfolio, similar to how many companies have regarded BTC as "digital gold."

The combination of explosive spot ETF and large-scale corporate treasury accumulation of ETH has sent a strong signal: Ethereum is moving beyond the pure crypto community to enter the traditional financial space.

If Bitcoin is likened to a store of value, then Ethereum is gradually being positioned as the new generation financial infrastructure, with particular appeal to institutional investors with a long-term vision.

ETH Price Movement: Adjusting but Still Holding Demand

Although the long-term prospects of Ethereum are receiving much support, the short term market is still experiencing significant fluctuations. The sell-off at the end of August caused ETH to lose some of its growth gains, reflecting the overall caution among investors in the context of a macroeconomic environment still fraught with uncertainties.

As of now, ETH has decreased by about 9.6% from its recent all-time high of 4,946 USD, falling below the 4,500 USD mark. If selling pressure continues to increase, the price could slide towards the 4,100 USD area – which is also the important support level identified by the lower Bollinger Bands on the daily frame. This price range will play a key role in determining whether ETH is just undergoing a short term adjustment or entering a more significant weakening phase.

The daily RSI index has remained above the neutral level since July, indicating that the bullish momentum in the short term has not yet been broken. This is a positive sign, implying that demand is still present and the market is capable of absorbing selling pressure.

ETH Price Chart | Source: TradingViewHowever, if the RSI falls below the neutral threshold, this signal could pave the way for a deeper decline, pushing ETH below the 4,100 USD mark. At that point, market sentiment will face additional pressure, and a strong correction scenario could become a reality.

It is noteworthy that despite the price adjustment, many derivative market data indicate that demand remains strong. Investors have not abandoned ETH, but instead tend to wait for strong support zones to increase their positions. This reinforces the view that the current adjustment may be healthy, serving as a "cooling off" period before the market enters a new growth phase.

Market Psychology

Despite the short-term fluctuations on the price chart, the derivatives market is sending positive signals. Data from the options contracts show that the Delta skew curve 25 – an important indicator reflecting investor sentiment – has increased from 1% to 4% in the short maturities, ranging from one week to one month.

This trend means that traders are opting for call options more than put options. In other words, even in the context of ETH adjusting, speculative demand remains strong, and expectations for the recovery of this currency in the short term are present. This is a signal that the market has not lost confidence, but is just temporarily "gaining momentum" for a new growth phase.

Source: VeloAccording to Tom Lee's forecast, the outlook for Ethereum can be seen through three distinct layers. In the short term, ETH is aiming for a target of 5,500 USD, but it heavily depends on the ability to absorb the current selling pressure. In the medium term, the major momentum comes from the wave of ETFs, the increasing involvement of financial institutions, and the strong expansion of stablecoins, which helps ETH target the threshold of 12,000 USD. In the long term, Ethereum is expected to become the core infrastructure for both global finance and artificial intelligence, with smart contracts and ZKP technology playing a fundamental role.

From many perspectives, Ethereum is no longer just an asset for speculation, but is gradually becoming a strategic piece in the transformation of the digital economy. The convergence of strong institutional capital flow, optimistic derivative sentiment, along with long-term macro catalysts, indicates that ETH is positioning itself as a foundational layer of the blockchain and AI era.

In other words, short-term corrections are not necessarily negative signals, but can become accumulation opportunities for investors who believe in the long-term picture. With Ethereum, the current risk may be the "price of the future," where the rewards belong to those who patiently accompany the strategic vision.

Justin