Interview with Wall Street's Oracle Tom Lee: Bitmine stocks have extremely high liquidity, and a $15,000 year-end price for ETH is reasonable
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Interview with Wall Street's Oracle Tom Lee: Bitmine stocks have extremely high liquidity, and a $15,000 year-end price for ETH is reasonable
People always start declaring bubbles in the mid-to-late stages of the market, while the real top usually appears when no one expects a downturn.
Navigating Web3 tides with focused insightsCompiled & Translated: TechFlow
Guest: Tom Lee, Chairman of Bitmine
Hosts: Ryan Sean Adams; David Hoffman
Podcast Source: Bankless
Original Title: The World’s Largest ETH Holder - Tom Lee on Treasuries, Ethereum Dominance, and Wall Street
Air Date: August 6, 2025
Key Takeaways
In this episode, we interview Tom Lee, chairman of Bitmine, discussing how his Ethereum asset management company has rapidly grown and its goal—owning 5% of the total ETH supply.
Tom is highly confident in Ethereum's future, believing its value could surpass Bitcoin and predicting prices between $4,000 and $15,000. He also shares insights on market dynamics, warnings about leverage risks, and unique perspectives on valuations for Ethereum and NFTs like Pudgy Penguins.
Highlights Summary
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Ethereum is one of the most important macro investment opportunities over the next decade. Therefore, we aim to act quickly, acquiring as much Ethereum as possible at around $3,500 before prices surge similarly to recent Bitcoin rallies.
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Ethereum has even greater upside potential than Bitcoin. Current prices are clearly undervalued.
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Short-term Ethereum market performance isn't solely determined by fair value. Looking back at 2017, Bitcoin started the year at $1,000 but didn't begin its vertical climb until August. I believe Ethereum is experiencing a similar moment to Bitcoin in 2017, with Wall Street finally embracing Ethereum.
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The core story of Bitmine lies in scarcity. We have a clear strategic goal to acquire 5% of Ethereum, backed by an exceptionally strong balance sheet—a major advantage. Additionally, our stock liquidity is extremely high, trading around $1.6 billion daily, comparable to Uber.
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Ethereum is one of the most significant macro investment opportunities over the next decade—not only part of Wall Street's blockchain financialization but also a critical component of U.S. strategy for AI dominance. As the largest blockchain compliant with U.S. laws, Ethereum is a legitimate and recognized blockchain.
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Compared to ETFs, treasury strategies allow you to earn staking yields on Ethereum. Ethereum treasury companies aren't just alternatives to Ethereum ETFs—they're key infrastructure within the ecosystem. Beyond staking rewards, these companies can generate revenue in other ways.
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MicroStrategy’s stock trades around $3 billion. In contrast, Ether Machine, the third-largest ETH holder, trades only $7 million today. Our volume is 100 times that of Ether Machine. Bit BTBT, the fourth-largest holder, trades $49 million today. This shows massive differences in liquidity, directly impacting growth speed—high growth requires extremely liquid assets.
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We recommend clients allocate 1%–2% of their portfolio to Bitcoin—an investment that has already yielded 120x returns for some. I believe Ethereum today resembles early Bitcoin. Though considered by some a "dormant chain," its stability stands out—zero downtime in ten years. This matters greatly to Wall Street, which has now decided Ethereum will be the foundational chain for future development.
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In the short term, I believe Ethereum should return to at least $4,000. By year-end, reaching $7,000—or even $12,000 or $15,000—is reasonable.
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People always declare bubbles during mid-to-late stages of a market cycle, while true tops usually appear when no one expects them.
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I own quite a few Pudgy Penguins merchandise items—it's probably my favorite Ethereum NFT.
Introduction
Ryan:
Thanks for tuning in. Today we’re joined by legendary Wall Street investor Tom Lee, chairman of the newly formed Ethereum treasury company Bitmine. Great to have you here. Honestly, I never expected you to launch an Ethereum treasury company in 2025—but you’ve done exactly that.
As of recording, Bitmine holds 833,000 Ethereum, roughly 1% of total supply. I believe you’re now the world’s largest public Ethereum treasury company. How does that feel?
Tom Lee:
I think our progress has been very rapid. We announced the plan on June 30 and completed acquisitions by July 8—just 27 days. We moved extremely fast to acquire Ethereum. This is important because MicroStrategy proved the effectiveness of the treasury strategy, delivering 30x returns. Back in August 2020, MicroStrategy traded at $13 while Bitcoin rose from $11,000 to $120,000.
I believe Ethereum is one of the most important macro investment opportunities over the next decade. So we want to act swiftly, buying as much Ethereum as possible at ~$3,500 before prices experience a sharp rise similar to recent Bitcoin moves.
Rapid Growth of ETH Treasury Companies
David:
Unlike MicroStrategy, when you launched Bitmine and announced your Ethereum treasury strategy, other companies quickly followed. Joe Lubin’s ConsenSys launched Sharp Link within five days of your announcement. Now there’s a wave of Ethereum treasury firms. Are you aware of others chasing you? Why did all these events cluster into a single two-week window?
Tom Lee:
Maybe great minds think alike. I’m not sure. You're right—previously, the market had mainly Bitcoin treasuries, a few Solana-focused ones, and some hype-driven names. SharpLink was actually the first to announce an Ethereum treasury, back in May. We were latecomers, following SharpLink. But I think Ethereum makes perfect sense as a treasury strategy.
First, if you’re bullish on Ethereum’s long-term prospects, that justifies the treasury approach—especially since it offers staking yield, unlike ETFs.
Second, due to proof-of-stake, these treasury companies are essentially blockchain infrastructure providers. In return, they earn staking rewards—which translate directly into net income. For example, we hold over $3 billion in Ethereum and earn over 3% annual staking yield—that’s pure profit.
Another key factor is scarcity. I believe Bitmine’s core narrative centers on scarcity. We have a clear strategic target: acquire 5% of Ethereum, supported by a robust balance sheet. That’s a major strength. Plus, our stock liquidity is extremely high—around $1.6 billion traded daily. This makes us the 42nd most liquid stock in the U.S. market today. Our trading volume rivals Uber’s. Even though Bitmine’s market cap is only $4 billion versus Uber’s $184 billion, our trading volume is comparable.
Ryan:
Tom, let’s talk about that 5% target. I’ve heard you mention it. Five percent means about 6 million Ethereum. If you already hold 833,000 after just four weeks, that’s incredibly fast.
Are you seriously planning to buy 5% of all Ethereum? At current prices, acquiring 5% would cost roughly $20 billion. Achieving that isn’t easy, especially at today’s levels. How specifically do you plan to achieve this? Is 5% a serious goal or symbolic? If serious, what’s your execution plan?
Tom Lee:
MicroStrategy currently holds 3.2% of Bitcoin’s circulating supply. But their actual goal is to own at least 1 million BTC—roughly 5% of total supply. Once MicroStrategy owns 1 million Bitcoin, they’ll play a crucial role in the ecosystem. For instance, if the U.S. government wanted to build a strategic Bitcoin reserve, directly buying 1 million BTC on open markets could be nearly impossible—the price might instantly spike to $1 million once such plans were revealed.
So indirectly holding Bitcoin via MicroStrategy could be easier. I call this “sovereign protection.” MicroStrategy took five years to reach 3%, averaging $160 million worth of Bitcoin purchases per day. Since inception, Bitmine has averaged $800 million to $1 billion in daily Ethereum buys—12 times faster than MicroStrategy. So we expect to reach 5% much quicker. It’s logical—we aim to become a responsible entity.
We fully align with Ethereum’s legal compliance principles—all operations happen in the U.S., meeting Wall Street and federal regulatory standards, especially under current scrutiny. Just as importantly, Ethereum itself will become central to Wall Street’s blockchain financialization.
Ultimately, staking Ethereum will matter to Wall Street as much as buying Nvidia GPUs matter to gamers. Buying GPUs may be more profitable than gaming itself. Similarly, if Wall Street wants to tokenize real-world assets like money markets, dollars, or equities, they’ll want to hold Ethereum directly—and stake it through entities committed to advancing Ethereum. So I believe we play a vital role through staking.
Goal: Hold 5% of Total ETH Supply
Ryan:
Tom, if you’re growing 12 times faster than MicroStrategy, reaching 5% could take just one to two years. That’s undoubtedly rapid progress.
Do you think Ethereum could see a sovereign protection strategy emerge? You mentioned many commercial banks, including JP Morgan, are gradually moving operations onto blockchains. Also, the Genius Act promoting stablecoin legislation effectively means the U.S. Treasury and central bank could peg the dollar to Ethereum—with Ethereum clearly leading in this space.
Is there a similar sovereign option possible? For example, might the U.S. government or another nation contact you saying: “We notice you hold large amounts of Ethereum. We’d like to buy Ethereum for the U.S. Treasury, adding it to our balance sheet. Since you already hold so much, can we do an OTC deal?” Do you think this scenario is plausible?
Tom Lee:
I think every point you made is reasonable—this is a very logical hypothesis. Suppose our goal isn’t sovereign asset protection but advancing Wall Street’s agenda. The Genius Act, SEC—they want to migrate the entire financial system to blockchains, and Ethereum, as the largest blockchain compliant with U.S. law, is a legal and recognized platform. This is crucial. Of course, other nations can use it too, but the U.S. clearly wants to strengthen its position and leadership on Ethereum.
Beyond blockchain financialization, we must consider AI development. If you want to tokenize robots or intelligent systems, you’ll choose a highly secure blockchain. That’s why both tech and Wall Street are gradually converging on Ethereum.
Would firms like Goldman Sachs or JP Morgan prefer Ethereum scattered across millions of wallets? They don’t seek centralization, but they want staking processes to be fully compliant—not left to individual discretion. This is precisely what Bitmine emphasized from day one: we have a clean balance sheet with no complex capital structures.
We’re progressing steadily. While we haven’t formally announced our staking solution, we’re carefully planning next steps. Managing $3 billion in Ethereum is a serious undertaking. We want full compliance with U.S. regulations.
I completely agree with everything you said. These views show that Ethereum treasury companies aren’t just substitutes for Ethereum ETFs—they’re critical infrastructure in the ecosystem. Beyond staking yields, they can generate revenue in other ways. So yes, the treasury companies you highlighted play a vital role.
Ethereum’s Role on Wall Street
Ryan:
Tom, something puzzles me—and I suspect many others wonder too. Why hasn’t Ethereum broken $4,000 yet? You mentioned Bitmine acquired $3 billion in Ethereum within a month. If you really bought that much, why hasn’t the price pushed above $4,000? How did you continuously buy at $3,500? Where did all that Ethereum come from?
Tom Lee:
We’ve learned a lot through this process, but as one of the largest Ethereum buyers, I can’t disclose specifics. What I can say is that short-term Ethereum market movements aren’t entirely driven by fair value. For example, last week Ethereum dropped to $3,300 because traders triggered liquidations or executed hedges.
Some view Ethereum as a “dead chain” and bet against it, backing alternative blockchains to force market liquidations. These dynamics affect short-term pricing. But wasn’t this exactly Bitcoin’s situation in 2017? In 2017, Bitcoin started at $1,000 but didn’t surge vertically until August. I believe Ethereum is now having its “2017 Bitcoin moment,” with Wall Street finally supporting it.
David:
We haven’t seen this level of Wall Street interest in Ethereum assets and networks for four or five years. Now funds are flooding in from various parts of the Ethereum ecosystem. When people ask why you chose an Ethereum treasury instead of a Bitcoin one—given players like MicroStrategy, Hype, or Ethena—what makes Ethereum treasuries attractive compared to Bitcoin counterparts?
Tom Lee:
First, I’m a strong Bitcoin supporter. I believe Bitcoin is the right choice. According to our fund strategy research, Bitcoin could reach $1.5 million per coin. So Bitcoin’s story remains compelling.
But Bitcoin and Ethereum play different roles in financialized worlds—that’s the key distinction. Ethereum symbolizes finance’s transition to blockchain technology, tied to AI and digital securities. Ethereum provides a natively digital way to link real-world assets with digital securities. That’s why investors choose Ethereum treasuries. If I were investing, I’d pick MicroStrategy—it’s a safe choice, especially within fund strategy ETFs. But MicroStrategy’s appeal lies in its daily accumulation of Bitcoin.
Ethereum treasuries are currently the only way for U.S. equity investors to gain exposure to Ethereum assets—unless they buy Ethereum directly or through an Ethereum ETF. For institutional investors, this is a major theme. They won’t simply say, “Okay, in my $50 billion fund, Ethereum is my top trade.” Instead, they’ll ask, “How do I get direct exposure to Ethereum assets?” Right now, they can’t buy Ethereum ETFs due to fund parameter restrictions. So for professional U.S. equity investors, Ethereum treasury companies are the sole path to Ethereum exposure.
That’s why investors like Cathie Wood have made major investments in Bitmine. Bill Miller also announced a significant investment in Bitmine last week. These seasoned crypto investors recognize this as the best way to gain macro exposure to Ethereum.
Accumulating More ETH
David:
What’s your strategy for accumulating ETH? Beyond leveraging MNAV premium to grow assets on the balance sheet, what other methods do you use? Assuming no MNAV premium, how do you increase Ethereum holdings on your balance sheet?
Tom Lee:
Great question—I have many answers, but some strategies are proprietary, so I can’t share details. Still, investors shouldn’t oversimplify treasury companies. We’re now the world’s third-largest crypto treasury firm, behind only Mara Blockchain and MicroStrategy. Our crypto asset scale exceeds Meta Planet. The significant difference in scale and liquidity enables diversified strategies beyond a single method—this may be our key differentiator.
Ryan:
Why does the MNAV premium exist? Can you explain? Some investors say MNAV should stay near 1, maybe slightly above. During bear markets, it might drop below 1. Why do crypto treasury firms have MNAV premiums?
Tom Lee:
I can explain from numerical and non-numerical angles. Bitmine has strict cost controls. Suppose we hold $3 billion in Ethereum. You might say it’s just an ETF. Assume we invest at 1x NAV with Ethereum yielding 3%. If we distribute that yield as net income to investors, we can assign it a money-market multiple—say 5%. This amplifies the yield to 20x, meaning 3% yield adds 0.6x to NAV.
Beyond that, two key factors influence valuation. First is growth velocity. When we launched the Ethereum strategy on July 8, the value per Ethereum share was just $4. By July 27, it reached $23—and it’s higher now. While we haven’t disclosed latest figures, it has increased. Within ~20 days, value per Ethereum share rose $19.
That’s growth velocity. When calculating NAV, you must account for this ongoing growth and assign it a multiple. MicroStrategy earns a 1.7x premium for adding $160 million in Bitcoin daily—our pace is 12x faster. Theoretically, our premium should be higher. With MicroStrategy’s 0.6x premium, 12x speed implies 7.2x. Obviously theoretical, but worth considering.
That’s just velocity impact. The second factor is liquidity. MicroStrategy trades ~$3 billion daily. As the second-largest crypto treasury, we trade $1.6 billion daily. Compare that to Meta Planet, trading only $50 million daily. Our liquidity advantage is clear—and deserves a premium.
Thus, Bitmine’s valuation starts at 1x NAV, plus 0.6x for yield, totaling 1.6x. Then add velocity premium. We know MicroStrategy earns 0.6x for adding $130 million in Bitcoin daily—ours is 12x faster. Finally, liquidity premium: better liquidity allows cheaper issuance of other financial instruments.
Ryan:
Yes, liquidity premium comes from being the biggest, strongest, deepest in the market. Velocity premium is fascinating—let’s dig deeper. In the first month, your growth was 12x MicroStrategy’s. But can this pace continue over the next 11 months—the full year? Let’s discuss. How did you achieve this Ethereum growth rate? Can this level be sustained?
Tom Lee:
This reflects liquidity functionality. Liquidity and growth velocity are two sides of the same trait. We achieve high growth thanks to superior liquidity. For example, by 2 PM today, our trading volume hit $800 million.
MicroStrategy trades $3 billion. Meanwhile, Ether Machine, the third-largest Ethereum holder, trades only $7 million today—100x less than us. Bit BTBT, the fourth-largest holder, trades $49 million. Huge liquidity gaps directly affect growth velocity—high velocity demands extreme liquidity.
Ryan:
One more question on velocity. Since you say velocity depends on liquidity, where does liquidity come from? How do you gain more liquidity?
Tom Lee:
Excellent question. I believe liquidity stems from team collaboration and resource integration.
First, I lead this project as chairman, and among Bitmine’s private investors, Mosaics is a well-known and experienced macro hedge fund. Their involvement helped attract heavyweight investors like Founders Fund and Stan Druckenmiller. Notably, Stan Druckenmiller is disclosed as a holder in our registration statement. Others include Ark and Bill Miller—names with immense influence in traditional finance and venture capital. Their support signals trust in our vision.
Second, I’ve long championed crypto and its integration with traditional finance. As early as 2017, we stated Wall Street would gradually focus on Bitcoin. From then on, Bitcoin became a serious institutional asset, expanding ownership. Now Ethereum is having its “2017 moment,” gaining institutional favor. This trend makes logical sense and helps advance treasury goals.
Naturally, I support projects like Sharp Link and Andrew Keys—we’re united toward a shared goal. By staking Ethereum, we enhance its security, making it a reliable U.S. blockchain. All of us collaborate toward the same vision, advancing the crypto ecosystem.
Ethereum’s Breakout Moment
Ryan:
Tom, many listeners entered crypto after 2017. I’m not one of them. I remember seeing you on CNBC in 2017—you were the only person in a suit on traditional financial media talking about Bitcoin.
Your communication style resonated with many in crypto. Could you revisit what you mean by Ethereum’s 2017 moment? Compare it to Bitcoin in 2017 and describe the shift in Wall Street perception. Help us connect the dots. What was Bitcoin like in 2017? What parallels exist with Ethereum today?
Tom Lee:
In 2017, Fundstrat focused on macro trends and thematic research. We began studies that eventually led us to Bitcoin. Two were particularly important.
One studied millennials. Back then, the oldest millennials were about 25. We realized they’d become a major economic force. While accepted today, this was novel then. Our research was so deep we partnered with Snapchat to publish whitepapers on monetizing millennials. Snapchat tried convincing advertisers to target Gen Z and millennials, while legacy brands like Pepsi still favored Gen X. Sounds odd now, but that was reality.
The second study focused on Bitcoin’s price action. When I worked at JPMorgan, Bitcoin was $100. After leaving, I saw it rise to $1,000—market cap hitting $100 billion. I’d never seen an asset grow so large without fundamental support. We spent months researching Bitcoin. While I didn’t grasp every detail, we identified two main drivers: wallet count growth and transaction activity per wallet. This is essentially Metcalfe’s Law—value grows exponentially with users. We predicted Bitcoin could reach $25,000 by 2022, or even $100,000 if capturing 5%-10% of gold’s market cap. So we began telling this story.
We believed Wall Street needed to understand Bitcoin as “digital gold.” We were the first firm bringing Bitcoin to institutions. Back then, 0% of institutions owned Bitcoin—100% retail. Over eight years, Bitcoin’s main narrative became its store-of-value function. Yes, it’s a payment system, but the compelling aspect was value storage. Research showed baby boomers held gold, while millennials would choose Bitcoin as their gold. A generational shift and digital substitution story.
That was the backdrop. I hosted many webinars at Fundstrat, but lost institutional clients who deemed our views too radical. They questioned recommending an asset associated with drugs and darknets as legitimate. Our reputation suffered. But as you know, Bitcoin later hit $120,000. We advised allocating 1%-2% of portfolios to Bitcoin—a move that delivered 120x returns for some clients.
This made many clients aggressive. I believe Ethereum today mirrors early Bitcoin. Though seen by some as dormant, its stability is remarkable—zero downtime in ten years. This is critical for Wall Street, which has now chosen Ethereum as its foundational building chain.
David:
Much has happened in the past six months. Circle’s IPO performed strongly, Coinbase stock did well, Robinhood announced an upcoming Ethereum Layer 2. The term “tokenization” is spreading fast. Many developments are Ethereum-backed. Circle’s USDC originated and grew on Ethereum. Coinbase, the largest public crypto firm, is building an Ethereum L2. Robinhood, a traditional finance player, is also building a Layer 2. Though not a crypto firm, it enters crypto by legitimizing these technologies.
Does Wall Street understand Ethereum underpins many current movements? Is this why treasury firms have such strong momentum? Or am I fabricating this narrative?
Tom Lee:
David, your logic is sound. But Wall Street only connects dots when profits emerge. Consider Apple, Amazon, or Nvidia shareholders. Nvidia exemplifies exponential growth, yet once endured a year of stagnation, deemed “dead money.” Years later, the market re-rated it.
Ethereum is undergoing a similar phase. On-chain activity hits record highs, communities revive with price recovery. More people use Ethereum, and smart contract functionality gives it an edge over Bitcoin, which can’t support stablecoins.
I don’t see Ethereum not hitting $15,000 soon as a bad sign. We recommended Tesla and Nvidia—gains weren’t linear with revenue but came in big jumps. I hope Ethereum stays low longer so we can accumulate at better prices. At $17,000, it becomes too expensive for treasury firms. Sure, it lifts their stock, but personally, lower prices are better.
Ethereum’s Potential for 100x Growth
Ryan:
Like in 2017, Wall Street didn’t understand Bitcoin. You suggest by 2025, Wall Street still may not fully grasp Ethereum. Maybe they’re starting to, but it feels similar to Bitcoin’s early trajectory. Remember 2017, when you discussed Bitcoin on traditional finance shows at $2,000–$3,000? You made bold calls on Squawk Box—Bitcoin to $20,000 or $40,000. Many called it reckless—but you were proven right.
Now Ethereum sits at similar levels—around $3,000. You’ve made similarly bullish price predictions, causing waves in traditional finance. Could Ethereum achieve similar growth to Bitcoin? What’s your price outlook?
Tom Lee:
I believe Ethereum’s upside exceeds Bitcoin’s because skepticism is greater. Bitcoin wasn’t widely accepted early on, but people didn’t short it—just disbelieved it.
We predicted Bitcoin would hit $100,000 in 2017—seemed crazy then, but the growth didn’t take long. Bitcoin achieved 100x in our lifetimes. Ethereum today closely resembles Bitcoin in 2017. Wall Street still doubts whether Ethereum will survive long-term, partly due to its shift to proof-of-stake and earlier high issuance. But these issues are resolving. Skepticism centers on whether Ethereum truly benefits from Layer 1, rather than merely supporting Layer 2. I believe this view will break—when it does, step-change growth follows. So Ethereum’s potential could exceed Bitcoin’s 100x.
If Bitcoin hits $1 million, Ethereum’s potential becomes staggering. Ethereum isn’t just part of Wall Street’s blockchain financialization—it’s also key to U.S. strategy for AI dominance.
If MicroStrategy’s Bitcoin rises threefold, Ethereum treasury firms could also triple. So I see Ethereum treasuries as a solid investment category. Bitmine’s unique strategy places it at the forefront, while Ethereum itself remains severely undervalued.
Ryan:
Your forecast may shock some—100x Ethereum implies a $40 trillion market cap. You also suggest Ethereum could surpass Bitcoin in network value—a controversial view in crypto circles, despite many Ethereum believers holding this long-term. In the near term, how do you see Ethereum’s price evolving? By year-end or next cycle peak, what levels might it reach?
Tom Lee:
In the short term, I believe Ethereum should return to at least $4,000, as today’s Ethereum story is stronger than last December’s, when it traded at $4,000.
In fact, Ethereum performs better today than a year ago. Last year, the ETH/BTC ratio was 0.05—about $6,000. So narratively, Ethereum should reach at least that level.
Additionally, by year-end, as other Ethereum treasuries begin buying and Bitcoin rises, I believe $7,000—or even $12,000 or $15,000—is reasonable.
By 2026, the Fed will initiate a dual shift—central bank liquidity will rise, further boosting Ethereum. I’m unsure if crypto has defined cycles, but if so, it favors Ethereum. Personally, I’d prefer Ethereum treasury firms see steady growth over five years before explosive moves. But it may happen abruptly in a step-function.
For example, in 2009 I forecast S&P 500 earnings—markets nearly fell 80%, but by 2010, S&P 500 earnings rebounded to $60. Today, they’re $300—showing traditional market earnings can grow exponentially. Similarly, crypto network value could reach $20 trillion.
We’re witnessing stock-market-like growth. Crypto treasury valuations rely on balance sheets, not profitability. Like Exxon Mobil, valued on reserves over decades, not earnings. Crypto treasuries are becoming the new Exxons.
Valuing ETH
David:
Tom, you’ve mentioned attempting to model crypto valuation, yet we recognize these assets resist accurate prediction via traditional models. Today, firms like Coinbase, Robinhood, and Circle build apps on Ethereum, Layer 2s depend on Ethereum, tokenization tech runs on Ethereum. I believe these narratives heavily impact Ethereum’s value and price.
When analyzing these prices, how do you deconstruct them? Do you view Ethereum’s price as reflecting fee demand? Or its role as value storage in DeFi, or staking demand? How exactly do you analyze Ethereum’s value and price?
Tom Lee:
I might ask: David, have you seen anyone accurately predict Bitcoin’s price using spreadsheet models? In reality, no one ever has.
Or if someone did, a year later the model fails to explain new changes. So I think those trying to model Ethereum with spreadsheets make the same mistake as those using earnings or ISM indices to predict the S&P. That’s also why no one accurately predicts the S&P. Early in my Wall Street career, I learned: “Valuation models focus too much on E (earnings) and ignore PE (price-to-earnings).” Many spend excessive time modeling earnings, but PE drives prices. Ethereum’s price won’t be set by one week’s transactions but by market recognition of its five-year value. So I don’t believe in over-relying on models claiming precise price forecasts. My view on stocks like Palantir and Tesla is similar. Fundstrat consistently judged these correctly because we weren’t constrained by traditional models.
Ryan:
Then how do you size the market? Do you compare Ethereum to other assets? Like in 2017 comparing Bitcoin to digital gold—gold worth ~$20 trillion. Do you compare Ethereum to digital oil to discuss its ceiling?
Tom Lee:
That’s part of valuation. I’ve seen reports calling Ethereum digital oil—solid analysis. I assume you’ve read similar research. Mosaic built two models for Ethereum—one based on banking system proxies, another on payment system proxies. But ultimately, if I’ve learned one thing from stocks, it’s not to be bound by rigid frameworks. Many try confining predictions to standardized models—SOPs. For example, when the S&P dipped in April, many thought falling earnings meant further declines—my team was the only strategist not cutting annual forecasts. Market then staged a V-shaped rebound. This can’t be modeled in spreadsheets—it reflects market resilience and mechanics.
I don’t oppose frameworks, but Ethereum’s current price of $3,600 is clearly undervalued. Perhaps that’s the most important conclusion—not obsessing over spreadsheet projections for five years out. I know this sounds like avoiding a direct answer, but I believe it’s actually the best answer.
Risk Management Strategy
Ryan:
Tom, do you think crypto treasury firms—like those holding Bitcoin, Ethereum, or other assets—could overheat at some point? Maybe it’s PTSD from crypto trauma—we lived through GBDC trades and O Capital’s collapse, which impacted other markets.
We see treasury firms and newcomers entering at MNAV premiums, some comparing them to 1920s investment trusts. We all know how that bubble burst. Could these treasury firms enter a bubble phase? Prices inflate excessively, premiums reflexively rise, then suddenly crash—losing all value, even triggering systemic risk across crypto and broader markets? Are you concerned?
Tom Lee:
There’s much to unpack. First, look at liquidity in stock markets.
Today’s rally is called the “most hated V-shaped recovery.” In client video calls, we often hear: “Why should stocks rise?” and “valuations are too high.” Yet after each call, I grow more convinced stocks have reason to keep rising—because this isn’t consensus. In markets, skepticism often fuels price increases. If audiences were optimistic but prices didn’t rise, that might signal a bubble. But when everyone is bullish and prices soar—that’s danger.
The only way crypto treasury firms fail is if they use leverage. Any firm using complex instruments or debt structures, especially without scarce resources, faces risk. But firms like MicroStrategy and Meta Planet succeeded by changing the game. Those failing to innovate may struggle. But from my view, most crypto treasury firms use relatively simple structures.
If problems arise, the result may simply be price drops. I don’t think this triggers stock market crashes—those stem from debt issues or external shocks. I believe we’re far from a bubble. In fact, the market bets these assets are supply-constrained—so their value rises only if Bitcoin’s price increases.
Of course, eventually the market may enter a bubble phase. But I find, people always declare bubbles in mid-to-late cycle stages, while true tops appear when no one sees downside. Right now, everyone is bearish on Bitcoin and stocks due to recent performance.
If we were truly at a top, a few days of bearishness wouldn’t spark such concern. But the reality is, everyone says we’re at the top.
When market confidence is this fragile, the real top is likely far off—remember that.
Ryan:
Tom, what’s your view on current macro conditions? Events like tariffs or recessions could impact crypto. I recall interviewing you last August—you predicted the sudden end of yen carry trades, and you were right. What’s your current macro outlook? Anything worrying you, or do we sit in a good place?
Tom Lee:
I’m deeply concerned about institutions becoming politicized. The Fed and BLS should be independent, yet some BLS data revisions seem oddly timed. Still, I don’t believe they’re politically motivated.
From my view, the economy is very strong. When I speak with clients, many institutional investors believe we’re in recession. Someone might say: “Tom, if everyone thinks we’re in recession, you must be wrong—you can’t claim strength.” But in my 30 years, no one accurately predicted a recession. When everyone believes we’re in one, usually we aren’t. True recessions strike when business conditions suddenly shift, catching everyone off guard.
Like the housing bubble burst—but when everyone is cautious, bubbles don’t burst. The ISM index has been below 50 for 29 straight months—businesses are extremely cautious. If this were a recession, it’d be the first in history without ISM exceeding 50.
Seems odd, but observation suggests we’re mid-to-early cycle. Tariffs contributed to recession fears, while rate shocks reset business confidence. This fear actually helped avoid recession by curbing spending.
Look at data—corporate earnings are strong, no demand collapse in sight. Because everyone remains cautious.
Wall Street Misconceptions About Crypto
David:
Tom, I bet your phone rings off the hook from Wall Street. Every billionaire banker calls asking about Ethereum, seeking insight. What misconceptions does Wall Street still hold about crypto—especially Ethereum?
Tom Lee:
Great question—thanks for asking, David. Wall Street loves spreadsheets, so every call starts: “Tom, can you give me a model showing how stablecoin usage affects gas fees?” Then: “What’s stablecoin transaction volume? How much involves Ethereum? How much is Layer 2? Payment flows?” I think that’s the issue.
When people overly rely on spreadsheets, they fall into analysis paralysis—missing the bigger picture. Actually, Ethereum is a legally compliant blockchain—that’s vital. But this isn’t unique to crypto—similar blind spots exist in S&P 500 analysis. Someone might say: “S&P 500 long-term median P/E is 16x, profit margins are historically high, so margins will compress, index could fall to 3,000.” But such analysis never truly generates profits.
I suggest reviewing such views over the past 50 years—you’ll find they never made money.
David:
My take is people bringing spreadsheets to you are doing basic “cover work”—they need to justify buying large amounts of Ethereum or other assets to their boss and their boss’s boss. They need spreadsheets to complete that task. So how can we offer them a different kind of “cover”?
Tom Lee:
Excellent question. Fundstrat conducts evidence-based research—but we aren’t limited by assumptions. Unemployment data isn’t law, federal funds rate isn’t law, 10-year yield isn’t law. They’re never equilibrium points.
For example, Fundstrat launched an ETF last year called Granny Shots. With only 8 months history, it returned 17% YTD versus S&P 500’s 7%—1,000 bps outperformance. Morningstar ranked us top 30 among 1,400 funds—top 2% in large-cap funds. We use evidence-based methods but aren’t bound by traditional earnings forecasts. Our stock selection is highly disciplined.
If someone asks about Ethereum treasury firms, I won’t specifically discuss Bitmine. Start with Ethereum’s per-share health, then layer in four factors: velocity, liquidity, scarcity, and uniqueness. Larger firms deserve premiums due to network effects. Then ask: What’s Ethereum’s price? What are its risk/reward asymmetries?
If someone tries calculating Ethereum’s price down to the cent or $100, their analysis will never work—Ethereum has never been an equilibrium. But ask: If Ethereum hits $3,700, what’s the risk? What’s the floor? This year’s low was $1,700. What’s the upside? Look at Bitcoin’s price five years ago—might put Ethereum at $20,800. That reveals asymmetric risk/reward.
You derive price from Ethereum’s per-share health combined with velocity, liquidity, and scarcity—not spreadsheet math, but real-world context. If Ethereum hits $20,000, what are these firms worth? If it drops to $1,700, value halves. But if a firm doubles Ethereum per-share health in that period, its stock might stay flat. So highly liquid firms are optimal—they let you grow Ethereum exposure.
Final Thoughts on Ethereum
David:
Tom, do you hold other Ethereum-related assets? Like NFTs, or what’s your overall view on NFTs?
Tom Lee:
I own quite a few Pudgy Penguins merch items. They’re fun—I shared their designs last week. Hard to keep them in my office though—everyone wants one.
David:
So Pudgy Penguins is your favorite Ethereum NFT?
Tom Lee:
You could say that. I find Pudgy Penguins’ uniqueness appealing, and it’s very popular in Korea. Korea not only has strong stock culture but ranks among the world’s most active equity markets. I worked in Korea briefly and found its crypto culture advanced too. So Pudgy Penguins’ popularity in Korea further proves its value.
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