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Tom Lee's Latest Interview: These Four Catalysts Will Drive ETH's Price Up This Year

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Asset Tokenization and AI-powered DeFi will drive Ethereum to become the future global financial settlement layer, with ETH currently severely undervalued. The ETH to BTC ratio is expected to undergo a significant correction.

Original Title: Tom Lee: The Next 5 Years of Crypto Will Be About Ethereum
Source: Milk Road
Translated by: Felix, PANews

Tom Lee, Chairman of Bitmine, recently appeared on the "Milk Road Show" to discuss Ethereum's central role in the future financial system over the next 5 years. Tom Lee pointed out that due to the tokenization trend and the demand for on-chain transactions by AI agents, ETH is currently in a severely undervalued stage. He believes that the current market is a "course correction," indicating a significant rebound in the ETH to BTC ratio.

Host: What are your thoughts on last week's market trends and the recent surge in Ethereum?

Tom Lee: I know everyone has different views on this. But our view this year has always been: the fundamentals of cryptocurrency have been continuously strengthening. This is in stark contrast to the past "crypto winters." Past crypto winters were often accompanied by project closures, fund outflows, and shrinking use cases. But this time is completely different. We see that asset tokenization is gaining significant momentum. Many reputable traditional large financial institutions are building tokenized products and are particularly fond of the Ethereum platform. In addition, with the growth of AI capabilities, more and more signs indicate that AI agents fundamentally do not want to use the traditional financial system, so the crypto track is the most logical choice for them.

Therefore, in our view, the surge last week can be called a "course correction." Because the market price has finally begun to acknowledge that we should no longer be in a deep crypto winter. As you mentioned, the massive liquidation that occurred in the market precisely shows how many people were shorting and completely misjudged. Just as the famous John Russell said, "All recoveries start with short covering." So we believe that this is just the beginning of a larger market movement.

Host: Do you think a pullback will occur? Or has this completely opened a new cycle of the crypto bull market?

Tom Lee: I believe that for those who currently have no exposure to any crypto assets or are underallocated, this is clearly a "tactical" buy opportunity issue. My advice is, if you look back at past crypto cycles, ask yourself a question: If you were allowed to buy in the first 4 weeks of the market bottoming out or the first week after the bottom, what would you do? The answer is obvious; everyone would unhesitatingly choose to buy within these two windows.

If last week was the bottom, then you are buying one week after the bottom; if the market experiences a pullback next (which is entirely possible), then you are buying within four weeks before the bottom. In either case, as long as you have made the tactical decision to buy, you will thank yourself in the future. I believe that anyone trying to perfectly time the market bottom or attempting to buy in the middle of a rebound will ultimately miss out on the majority of gains.

We have published validated classic statistical data for over a decade: almost all of the gains in cryptocurrency have occurred in the best 10 days of the year. If you missed these crucial 10 days, your annualized return is actually negative.

So, how many of these super surge days have there been in the whole year of 2026? Probably only one day. This means that from now until the end of this year, cryptocurrency still holds significant upside potential.

Host:

Last week, Robinhood's CEO Vlad Tenev published an article, calling attention to the "Tokenization Super Cycle." What is your view on this Tokenization Super Cycle? What does it mean, and how will it change the financial markets as we know them today?

Tom Lee: I believe the Tokenization Super Cycle may be the most accurate and vivid description of the ongoing technological transformation. The reason Vlad's remarks carry high credibility is that he himself is a market-validated disruptor of traditional finance, having built and steered a company to such a massive scale.

Robinhood has brought a disruptive revolution to the traditional stock and asset markets, with the most prominent innovation being its provision of "commission-free trading." But what Vlad truly got right is that he fundamentally disrupted and reshaped the user experience of finance.

In the past, users on those old-fashioned traditional brokerage apps had to deal with lengthy and rigid trade confirmation forms; whereas when they switched to Robinhood, they could easily complete trades with just a swipe of a finger, showcasing Vlad's strong innovation acumen through this extreme simplicity and fluidity.

Today, the underlying rails of our current financial system are long overdue for a thorough 21st-century and even 22nd-century upgrade. The financial system today is an extremely bloated and complex machine: it is made up of countless layers of intermediaries, archaic legacy systems, and disconnected networks. The completion of a transaction requires various interface integrations and massive human intervention.

While many people think the current system works well (it does indeed function at low speeds), its speed, error rate, and operating costs are far from comparable to running on the blockchain.

This is the vision Vlad pointed out: if the financial system fully migrates to the crypto track, it will not only unleash faster and lower-threshold capital channels but, more importantly, it will create an unimaginable space for innovation.

Because once you can move assets in purely digital form at extremely fast speeds, many things we have never defined as "money" in the past will instantly become tradable digital currencies. This is the real nuclear-level release.

Today, a dollar has transformed into a stablecoin, evolving into a digital dollar; stocks are also evolving into "software" running on the blockchain through tokenization. And once you turn stocks and currencies into software, we can convert everything else that traditionally never belonged to money into digital money, such as membership points, personal reputation, influence, sponsorship rights, and even the present value of future contracts. They were difficult to liquidate in the past, but now they will be thoroughly financialized and monetized.

How big of a market can this create? You can calculate it like this: today's traditional financial system is massive, with over $150 trillion in liquid assets. But such a vast empire is essentially only driven by two extremely single asset categories: bonds and equities. All other financial products traded are derivatives of these two basic assets without exception.

And once tokenization is implemented, the potential market we face will no longer be just the $150 trillion in existences; it will soar to over $500 trillion. This includes intellectual property, future permits, untapped resources, and more. Therefore, the term "super cycle" not only does not exaggerate but may underestimate the terrifying volume of this wave of encryption technology innovation.

Host: As the world rapidly moves towards the era of "intelligent entities dominating everything on the chain," how can Ethereum maintain and continue to expand its absolute dominance in this ecosystem?

Tom Lee: When facing the future, some things we can be 100% certain about, while others are filled with uncertainty. One thing we can be absolutely certain of is: in the next 5 years, the autonomous capabilities of AI intelligent entities and their financial decision-making authority will undergo a tremendous leap.

Another thing that can be certain is: the current traditional financial underlying channels (such as Visa, banking systems), were entirely designed for "humans," and all risk control and multi-level credit are also to prevent credit risks in human-to-human transactions. They are fundamentally incompatible with the economic activities of AI intelligent entities.

But how could an AI agent swipe a physical Visa card? Traditional payments go through 24 different systems for back-and-forth verification when a card is swiped, while an AI agent may be executing high-frequency transactions at the sub-cent or even sub-microcent level, a scale that traditional digital and transaction platforms cannot accommodate, and the speed of traditional rails is absolutely incapable of supporting the high-frequency demands of AI. So they would never use traditional financial systems.

So, the only remaining paths are two: either to use encrypted channels (such as the Ethereum network), or to create an entirely new monetary system that belongs to the world of AI agents. If AI agents indeed create their own autonomous monetary system, it will mark the beginning of a complete human calamity and terror. This is because it would mean that humans are entirely kicked out of the control chain of the economic loop. Just imagine, if AI agents transact entirely within their self-created closed-loop economic system, using their self-issued credit medium, and only reluctantly converting to USD when they occasionally need to buy physical hardware or resources from humans, what a terrifying future that would be?

Therefore, whether from the perspective of top-down security design or due to government's stringent regulatory policies, humans must forcibly embed themselves into the financial decision-making loop of AI agents.

Looking globally, the only way to achieve this today, providing underlying mathematical rule constraints, is through the encrypted network. Through smart contracts, we can set rigid behavioral boundaries and credit limits on-chain for AI agents, giving them financial autonomy while completely eliminating the systemic risk of them running off with the money.

Host: Why the consistent weekly purchases of ETH? Why the recent initiation of share buybacks?

Tom Lee: When we founded Bitmine a year ago (June 27, 2025), the mission was very pure: to play the most core, foundational role in the reconstruction of the future global financial system. We firmly bet on it: Ethereum will ultimately become the global financial settlement layer of the future.

We aimed to acquire an Ethereum stake that is not too large to avoid centralization of the Ethereum network, yet substantial enough to allow us to enjoy the immense network value benefits. Through careful calculations, 5% is the perfect golden balance point.

This goal has also received high recognition and support from the Ethereum Foundation and several founders. At this scale, Bitmine can both act as a very powerful "market stabilizer" for the entire Ethereum network and guide and empower the development of the entire ecosystem in a healthy manner. For example, when supporting and anchoring a series of external entities split off from the Ethereum Foundation, we play an extremely critical cornerstone role.

The reason why we persistently dollar-cost average every week is fundamentally rooted in our sovereign valuation framework, where Ethereum is still severely undervalued. Not only will it perfectly capture all the spillover benefits of the future financial migration to blockchain, but it will also act as a guardian of human wealth and a ultimate firewall to regulate AI agent behavior.

So, what kind of valuation should this give Ethereum? For us, the intrinsic present value of Ethereum is far higher than today's $2,500. Even the previous all-time high of around $5,000 did not fully reflect Ethereum's true potential.

We can look at a very simple metric: the Ethereum-to-Bitcoin price ratio. Currently, this ratio is languishing around 0.03. At the peak of the 2021 bull market, this ratio reached 0.08. But please remember: the driving force behind the 2021 boom was merely some meme coins and speculative NFTs.

And what are we talking about today? The "total tokenization" of trillions of dollars worth of traditional assets, and the trillion-dollar scale of "AI agent finance". Therefore, this time, Ethereum's exchange rate against Bitcoin will not only easily reclaim the high ground of 0.08, but could even potentially surge to 0.25 or even reach parity at 1:1. This means that the current ETH is practically free money just waiting to be picked up.

This is why we buy in without hesitation every week. Through this action, we have effectively drained 5% of Ethereum's liquidity from the market, creating a huge "liquidity sink black hole".

In the future, this massive, highly concentrated Ethereum position will unleash extremely formidable strategic and ecological barriers: it can be used as seed capital to incubate and incentivize a large amount of DeFi frontier innovation; in the upcoming next crypto cycle, dozens of unicorn companies with valuations in the tens of billions will emerge, built on a brand-new cryptographic financial track, and Bitmine will have a unique capital advantage to deeply engage with, or even directly establish them.

Regarding the stock buyback you mentioned. We previously passed a $4 billion common stock repurchase authorization. When the buyback just started, this amount of funds was even enough to buy back 50% of the company's outstanding shares. The core purpose of setting up the buyback was to prevent our company's stock price from deviating too far from the fundamental value of the company (i.e., the Ethereum net asset value represented per share). When we initiated this program, we found that BMR's stock price was very attractive, and through repurchasing and retiring stocks, we could substantially increase the amount of Ethereum anchored per share of stock."

In the just past 5 weeks, we executed the largest stock buyback in the history of the entire crypto industry: at an average price below $15, we repurchased nearly 20 million shares of company stock on the open market. Today, our stock price has surged to $26. From any financial perspective, this is a textbook example of successful capital operation.

Host: The Ethereum Foundation underwent a structural split this year, giving rise to more function-specific, independently operated external organizations such as ETH Labs, ETH Systems, and Ethereum Institutional. Bitmine has been a cornerstone supporter of almost all these emerging institutions. As a long-term investor, how should one understand the significant evolution of the Ethereum governance structure and ecosystem map? What is the top-level strategy behind this?

Tom Lee: This does indeed trace back to a major transformation within the Ethereum Foundation earlier this year. The Ethereum Foundation had gradually evolved into a massive, unwieldy organization burdened with too many missions. As Ethereum matured, cramming all these divergent efforts into one foundation's basket no longer made sense.

For example, should tasks like onboarding large enterprise clients be spearheaded by a neutral nonprofit foundation? Or should the foundation act as backend support while independent entities are set up on the frontlines to engage with Wall Street? The same reasoning applies to privacy technologies, and even cutting-edge technical research such as ETH Labs. They ultimately came to a very wise conclusion: these functions should be spun off, establishing dedicated operational entities outside the foundation. This brought about two massive strategic advantages:

First, it enabled the introduction of external collaborations that were not possible within the foundation's framework. This includes external large financial institutions, tech giants, and more. Second, it allowed for a significant number of top Ethereum core developers to have direct ownership participation, without needing to be shoehorned into a nonprofit foundation as mere employees.

When this historic restructuring occurred, we believed Bitmine should play the role of a 'stability anchor,' providing initial support to each independent entity. We view some of these entities as 'public goods investments.' We measure their success not by 'how much direct financial return and dividends this entity can bring us,' but solely because supporting it is an absolutely correct path for Ethereum's long-term prosperity, allowing Ethereum to stand undefeated in global competition in the future.

It has been proven that since the establishment of these independent entities, they have won numerous remarkable battles in the market. This is undoubtedly a huge success.

Host: From your perspective, how can Ethereum begin to turn its vision into reality? In your opinion, what is the next major hurdle on the path to this goal?

Tom Lee: The following is mostly my personal industry observations and viewpoints, not absolute facts.

Almost my entire career has been spent on traditional Wall Street. I am all too familiar with the internal dynamics and pain points of these institutions. We need to understand a very harsh but crucial reality: just because the technology you have developed far surpasses existing solutions in scale, it does not mean that the traditional financial system will adopt it.

When will they show rapid adoption?

Only when they see a killer use case that has been successfully implemented, with a clear ROI.

Traditional institutions prefer to deal with organizations that fully understand and meet their compliance and business requirements. I believe that these newly established independent entities (entities spun out of the Ethereum Foundation) have all the necessary qualities because their core team members have been deeply involved in this institutional market for many years.

More importantly, these entities understand deeply under what circumstances Wall Street will compromise: that is when this new technology can bring a 10x improvement to their current business operations. The crypto track has clearly made a 10x leap in technical performance and settlement costs. But we still need to show these institutions a 10x return and impact on their financial statements or business benefits.

Host: What is the core driving force behind pushing the ETH to BTC ratio back in the remaining time of 2026? Do you think this historic breakthrough can stand firm and continue to ferment?

Tom Lee: I firmly believe that the ETH to BTC ratio will continue to soar in the coming time, with the return to the historical high of 0.08 just being the initial target.

I still have a very strong belief in the long-term prospects of Bitcoin. To me, Bitcoin is not just digital gold; it serves as a much better alternative asset to physical gold in terms of function and efficiency. Bitcoin still has multiple times the potential for growth in the future. However, if we were to write the grandest and most fundamental story of the entire cryptocurrency world in the next 5 years, this story would not be about digital gold but about the "super cycle of comprehensive asset tokenization" and the "AI intelligence financial restructuring of human wealth."

And as Vlad said, the vast majority, if not almost all, of this super wave will happen and settle on Ethereum. This is the underlying logic of Ethereum's inevitable comeback.

Specifically, from now until the end of this year, I believe there are 4 golden catalysts that will ignite the market:

1. First, the "Clarity Act" is expected to be officially passed in September. Many people think the crypto world does not need regulation. But this act is a life-or-death "safety net" for traditional financial institutions. Once there is a clear regulatory body and black-and-white compliance rules, Wall Street's massive compliance funds can legally and officially establish trillion-dollar businesses in the crypto space. Even if it is not passed, the crypto industry has already proven itself capable of wild innovation in the absence of regulation. However, this will not hinder the nuclear-level supercharge it will bring to the market once passed.

2. Second, the long-suppressed massive short positions and wait-and-see funds are pouring in crazily. A large amount of funds have been waiting for the so-called October low point, clinging to the "four-year cycle law" of crypto. Now, with only 5 weeks left until October, those who have been aggressively shorting, holding a significant amount of cash, or previously left to hype AI concept stocks are suddenly realizing: cryptocurrency is fundamentally the core settlement blueprint downstream of AI prosperity.

3. Third, there is a strong comeback of international funds represented by Asia. Asian markets such as South Korea were previously crazily chasing after the domestic stock market, but now they are quickly shifting their focus back to crypto assets.

4. Fourth, there is a performance competition among the world's top financial institutions. Here is a cold statistical fact: since June 30th of this year, the most eye-catching asset globally has been none other than cryptocurrency. During this period, Ethereum has surged by 54%, while gold has only risen by 13%, and U.S. stocks have seen only single-digit gains. Imagine this scenario, when the September 30th quarter-end arrives, if Ethereum still tops the global asset performance list, global fund managers will experience a frenzy of FOMO-driven forced buying and position chasing throughout the entire fourth quarter from September 30th to December 30th to avoid lagging behind their peers.

With these four major catalysts, the ETH to BTC exchange rate will easily break through the year's high. Even with a very conservative and restrained financial valuation, assuming the exchange rate only corrects to 0.04, as long as Bitcoin hits $150,000 as planned, Ethereum's price will directly stabilize at $6,000. Considering that 0.08 is its historical peak ratio, this is evidently a very conservative number.