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

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

Tom Lee, chairman of Bitmine, recently appeared on the "Milk Road Show" to discuss Ethereum's core position in the financial system over the next five years. Tom Lee pointed out that due to the trend of tokenization and the demand for on-chain transactions driven by AI agents, ETH is currently in a phase of being severely undervalued. He believes that the current market situation is a "course correction," indicating that the ETH to BTC ratio will see a significant rebound.

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

Tom Lee: I know everyone has different opinions on this. But our view this year has been that the fundamentals of cryptocurrency have been continuously strengthening. This stands in stark contrast to the past "crypto winter." Previous crypto winters were often accompanied by project failures, capital withdrawals, and shrinking use cases. But this time is completely different. We see that asset tokenization is gaining significant momentum. Many prestigious traditional financial institutions are building tokenized products and are particularly favoring the Ethereum platform. Additionally, with the growth of AI capabilities, there are increasing signs that AI agents do not want to use traditional financial systems, making the crypto track the most logical choice for them.

Therefore, in our view, last week's surge can be termed 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 large-scale liquidations happening in the market precisely illustrate how many people were shorting and completely misjudged the situation. As the famous John Russell said, "All rebounds begin with short covering." So we believe this is just the beginning of a larger market trend.

Host: Do you think a pullback will happen? Or has a new crypto bull market already begun?

Tom Lee: I think for those who currently have no exposure to crypto assets or are under-allocated, this is clearly a "tactical" buying opportunity. My advice is that if you look back at past crypto cycles and ask yourself a question: If you were allowed to buy in the 4 weeks before the market bottom or 1 week after it, what would you do? The answer is obvious; everyone would unhesitatingly choose to buy within those two windows.

If last week was the bottom, then you are buying in 1 week after the bottom; if the market pulls back next (which is entirely possible), then you will be buying within the 4 weeks before the bottom. In either case, as long as you make a tactical buying decision, you will be grateful to yourself in the future. I believe anyone trying to perfectly predict the market bottom and only buy in the middle of the rebound will ultimately miss out on most of the gains.

We have published a classic statistic that has been validated for over a decade: almost all gains in cryptocurrency occur during the best 10 days of the year. If you miss these crucial 10 days, your annualized return is actually negative.

So, how many of these super surge days have occurred throughout 2026? Probably only 1 day. This means that from now until the end of this year, cryptocurrency still holds enormous upside potential.

Host: Last week, Robinhood CEO Vlad Tenev published an article calling for attention to the "tokenization super cycle." What are your thoughts 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 technological transformation currently taking place. Vlad's statements are highly credible because he is a market-validated innovator who has disrupted traditional finance and has personally founded and scaled a company to such a large size.

Robinhood has brought a disruptive revolution to traditional stock and asset markets, with the most intuitive innovation being its "zero-commission trading." But what Vlad has truly done right is completely disrupt and reshape the user experience in finance.

In the past, users on those outdated traditional brokerage apps had to deal with lengthy and rigid trade confirmations; when they switched to Robinhood, they could complete trades with just a swipe of their finger, showcasing Vlad's strong innovative understanding.

Today, our existing financial infrastructure is long overdue for a complete upgrade for the 21st and even 22nd centuries. Today's financial system is an extremely bloated and complex machine: it consists of countless stacked intermediaries, outdated legacy systems, and disconnected networks. Completing a transaction requires various interfaces and massive human intervention.

While many people feel that the current system operates quite well (it does manage to function at low speeds), its speed, error rate, and operational costs are far from comparable to those running on blockchain.

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

Because once you can move assets in a purely digital form and at high speed, many things we have never defined as "currency" will instantly become circulating digital currency. This is the true nuclear-level release.

Today, one dollar has evolved into a digital dollar through stablecoins; stocks are also evolving into "software" running on the blockchain through tokenization. Once you turn stocks and currency into software, we can transform other things that traditionally do not belong to currency into digital money, such as membership points, personal credit, influence, sponsorship rights, and even the discounted value of forward contracts. These were difficult to monetize in the past, but now they will be completely financialized and monetized.

How large of a market can this create? You can calculate it this way: today's traditional financial system is extremely large, with over $150 trillion in liquid assets. But such a massive empire is essentially driven by only two extremely singular asset classes: bonds and stocks. All other financial products traded are, without exception, derivatives of these two underlying assets.

Once tokenization is implemented, the potential market we face will no longer be just the $150 trillion stock, but will soar to over $500 trillion. This includes intellectual property, future licensing rights, untapped resources, etc. Therefore, the term "super cycle" is not only not exaggerated but may actually underestimate the terrifying scale of this wave of crypto technological innovation.

Host: As the world rapidly moves toward an era of "AI agents dominating everything on-chain," how can Ethereum maintain and continue to expand its absolute dominance in this ecosystem?

Tom Lee: When facing the future, there are some things we can be 100% certain about, and some things are filled with uncertainty. One thing we can be absolutely certain of is that in the next 5 years, the autonomy and financial decision-making power of AI agents will undergo a tremendous leap.

Another certainty is that the current traditional financial infrastructure (such as Visa and banking systems) was entirely designed for "humans," and all risk controls and multi-level credit approvals are to prevent credit risks in human-to-human transactions. They cannot adapt to the economic activities of AI agents at all.

But how could AI agents possibly use a physical Visa card? Traditional payments require verification through 24 different systems, while AI agents may be executing high-frequency transactions worth only cents or even micro-dollars, which cannot be accommodated in traditional digital and trading platform systems, and the speed of traditional tracks cannot support the high-frequency demands of AI. Therefore, they will absolutely not use traditional financial systems.

So, the remaining paths are only two: either use crypto channels (like the Ethereum network) or create a completely new monetary system belonging to the world of AI agents from scratch. If AI agents really create their own autonomous monetary system, it will mark the beginning of a disaster and fear for humanity. Because this means that humans will be completely kicked out of the control chain of the economic cycle. Just imagine, if AI agents trade entirely within their own closed-loop economy, using their own issued credit media, only reluctantly exchanging for dollars when they occasionally need to purchase physical hardware or resources, what a chilling future that would be?

Therefore, whether from the perspective of top-level design security or due to strict government regulatory policies, humans must be forced to embed themselves into the financial decision-making closed loop of AI agents.

Looking globally, the only thing that can achieve this today, providing underlying mathematical rules, is the crypto network. We can set hard behavioral boundaries and credit limits for AI agents on-chain through smart contracts, thus granting them financial autonomy while completely eliminating the systemic risk of them absconding with funds.

Host: Why buy ETH every week without fail? Why recently initiate stock buybacks?

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

We hope to acquire a share of Ethereum that is neither too large to lead to centralization of the Ethereum network nor too small to allow us to enjoy the vast network value benefits. After 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 serve as an extremely powerful "market stabilizer" for the entire Ethereum network while also guiding and empowering the development of the entire ecosystem in a healthy manner. For example, we have played a crucial foundational role in supporting and anchoring a series of external entities split off from the Ethereum Foundation.

The reason we persistently invest weekly is fundamentally based on the premise that Ethereum is still severely undervalued in our sovereign valuation system. It will not only perfectly capture all the spillover dividends from the future financial migration to blockchain but will also serve as the ultimate firewall to protect human wealth and regulate the behavior of AI entities.

So, what kind of valuation should this bring to Ethereum? For us, the intrinsic present value of Ethereum is far higher than today’s $2,500. Even the previous historical high of about $5,000 still did not reflect Ethereum's true potential.

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

What are we talking about today? It is the "full tokenization" of trillions of traditional assets and the trillion-scale "AI financial entities." Therefore, this time the exchange rate of Ethereum to Bitcoin will not only easily recover the high ground of 0.08 but may even surge to 0.25 or even a 1:1 parity level. This means that the current ETH is practically free chips lying on the ground.

That’s why we buy without hesitation every week. Through this action, we have effectively forced the market to drain 5% of Ethereum’s liquidity, creating a massive "liquidity sediment black hole."

In the future, this large, highly concentrated Ethereum position will release extremely terrifying strategic and ecological barriers: it can be used as seed capital to incubate and encourage a large number of cutting-edge DeFi innovations; in the upcoming next crypto cycle, dozens of unicorn companies valued at billions, built on a new crypto financial track, will inevitably emerge, and Bitmine will have a unique capital advantage to deeply participate in or even directly establish them.

As for the company stock buyback you mentioned, we previously passed an authorization for a stock buyback of up to $4 billion. At the start of the buyback, this fund was even enough to buy back 50% of the company’s circulating shares. The core intention behind setting up the buyback was to prevent our company’s stock price from deviating excessively from the fundamental value of the company (i.e., the net value of Ethereum represented by each share). When we initiated this program, we found that BMR's stock price was very attractive; by buying back and destroying shares, we could substantially increase the amount of Ethereum anchored by each share.

In the past 5 weeks, we executed the largest stock buyback in the history of the entire crypto industry: at an average price below $15, we bought back nearly 20 million shares of the company’s stock in the open market. Now, our stock price has soared to $26. From any financial dimension, this is a textbook-level successful capital operation.

Host: The Ethereum Foundation underwent structural splits this year, evolving into more functionally clear and independently operating external organizations, such as ETH Labs, ETH Systems, and Ethereum Institutional. Bitmine is almost the cornerstone supporter of all these emerging institutions. As a long-term investor, how should one understand this significant evolution of Ethereum's governance structure and ecological landscape? What is the overarching strategy behind it?

Tom Lee: This indeed traces back to a major transformation that occurred within the Ethereum Foundation earlier this year. The Ethereum Foundation had gradually evolved into a large, bloated organization burdened with too many missions. As Ethereum matures, it is no longer reasonable to cram all these divergent efforts into one basket.

For example, should commercial development work, like connecting with large corporate clients, be led by a neutral nonprofit foundation? Or should the foundation play a supportive role in the background while establishing dedicated entities in the foreground to connect with Wall Street? The same reasoning applies to privacy protection technology and cutting-edge technology development like ETH Labs. They ultimately reached a very wise conclusion: these functions should be separated and dedicated operational entities should be established outside the foundation. This brings two significant strategic advantages:

First, it allows for external collaborations that cannot be realized within the foundation framework. This includes large external financial institutions, tech giants, etc. Second, it allows a large number of excellent core Ethereum developers to directly hold shares and participate without needing to be stuffed into the nonprofit foundation as employees.

When this historical reorganization occurred, we believed that Bitmine should play a "stabilizing anchor" role, providing initial support for each independent entity. In our view, some of these entities belong to "public goods investment." We measure their success not by "how much direct financial return and dividends this entity can bring us." We support them simply because they are an incredibly correct path for the long-term prosperity of Ethereum, enabling Ethereum to stand undefeated in future global competition.

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

Host: From your perspective, how can Ethereum begin to turn its vision into reality? What do you think is the next biggest challenge on the road to this goal?

Tom Lee: Most of what I am about to share belongs to my personal industry observations and opinions and does not represent absolute facts.

I have spent almost my entire career on traditional Wall Street. I know too well the internal ecology and pain points of these institutions. We need to understand a very cruel but extremely critical reality: just because the technology you develop far exceeds existing solutions does not mean that the traditional financial system will adopt it.

When will they show rapid adoption? Only when they see practical, operational, and clearly defined investment return scenarios.

Traditional institutions prefer to deal with organizations that can fully understand and meet their compliance and business needs. I believe that these newly established independent entities (the entities split from the Ethereum Foundation) are fully capable of this because their core team members have been deeply engaged in this institutional market for many years.

A more core point is that these entities understand under what circumstances Wall Street will compromise: that is, this new technology can bring a tenfold improvement to their current business. The crypto track has clearly brought a tenfold leap in technical performance and settlement costs. But we must also ensure that these institutions can immediately see a tenfold return and effectiveness in their financial statements or business benefits.

Host: In the remaining time of 2026, what will be the core driving force behind the return of ETH to BTC? Do you think this historic breakthrough can stand firm and continue to ferment?

Tom Lee: I firmly believe that the ratio of ETH to BTC will continue to soar in the coming time, and returning to the historical high of 0.08 is just the first target.

I still have a strong belief in Bitcoin's long-term prospects. In my eyes, Bitcoin is not just digital gold; its function and efficiency as a substitute asset for gold are far better than physical gold. Bitcoin still has several times of upside potential in the future. However, if we are to write the grandest and most core story of the entire cryptocurrency world over the next five years, this story will certainly not be about digital gold, but about the "super cycle of comprehensive tokenization of assets" and "AI financial entities reconstructing human wealth."

And as Vlad said, most, if not all, of this super wave will occur 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 four golden catalysts that will ignite the market:

1. First, the "Clarity Act" is expected to be officially passed in September. Many people feel that the crypto world does not need regulation. But this act is a "safety cushion" that is crucial 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 formally establish trillion-level businesses on the crypto track. Even if it does not pass, the crypto industry has already proven that it can innovate wildly in the absence of regulation, but this will not prevent it from bringing nuclear-level super support to the market once it passes.

2. Second, the massive short positions and waiting funds that have been suppressed for a long time are flooding in. A large amount of capital has been waiting for the so-called October low point due to adhering to the "four-year crypto cycle law." Now, there are only 5 weeks left until October. Those who have been shorting, holding massive cash, and previously exited to speculate on AI concept stocks are suddenly waking up: cryptocurrencies are essentially the core settlement landscape downstream of AI prosperity.

3. Third, the strong return of international funds represented by Asia. Markets in Asia, such as South Korea, previously chased local stocks madly, and now they are rapidly redirecting their attention back to crypto assets.

4. Fourth, there is the performance competition among the world's top financial institutions. This is a cold statistical fact: since June 30 of this year, the best-performing asset globally has been none other than cryptocurrency. Ethereum surged by 54% during this period, while gold only rose by 13%, and U.S. stocks had single-digit gains. Just imagine, when the quarterly settlement on September 30 arrives, if Ethereum still tops the global asset return rankings, then throughout the entire fourth quarter from September 30 to December 30, global fund managers will be forced to buy in a frenzy of FOMO to avoid lagging behind their peers.

Under these four catalysts, the ETH to BTC exchange rate is likely to break through this year's highest level. Even if we make a very conservative and restrained financial valuation, assuming the exchange rate only recovers to 0.04, as long as Bitcoin reaches $150,000 as expected, the price of Ethereum will be directly locked at $6,000. Considering that 0.08 is its historical ratio peak, this is clearly an extremely conservative figure.

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