Tom Lee: Ether may well surpass $10,000 in crypto treasury holdings in the next 12 months or set off a new cycle

The Zhitong Finance App learned that Tom Lee, co-founder and head of research at Fundstrat Global Advisors, expects Ethereum (ETH) to be well above $10,000 in the next 12 months, adding that the accelerated wave of crypto treasury purchases and potential institutional allocations may drive an unprecedented crypto cycle.

On Wednesday, Lee, chairman of Bitmine Immersion Technologies (BMNR), said during a discussion at Korea Blockchain Week that he is not sure if Ethereum can realistically reach this target “before the end of the year,” but “I think the price of ETH will be much higher than $10,000 in the next 12 months.” He said it is expected to be one of the larger crypto cycles.

Arthur Hayes predicted in the same interview that Ethereum could reach $10,000 by the end of the year. In response, Lee said that Hayes may have set the target too low, and indicated that Ethereum had risen 50 to 200 times in previous cycles.

Tom Lee said, “... First, we want to maintain maximum exposure to ETH because I think Arthur is conservative in a sense. You know, Ethereum has increased 50 to 200 times in the past cycle.”

Lee explains the potential upside by saying that if Ethereum rises 25 times from the previous cycle, it could theoretically reach around $62,000.

Crypto Treasury May Tighten Ethereum Supply

Lee believes that crypto treasury companies will play an important role in this trend. He anticipates that all digital asset treasury (DAT) will increase purchases over the next 12 to 18 months. “Ethereum DAT currently holds a total of 7% of the total supply,” Lee said. He said that this percentage could rise to 15% this cycle.

Bitmine is the largest Ethereum treasury, holding 6,001,302 ETH. This equates to 4.9% of Ethereum's supply, the document added.

BMNR shares fell more than 0.2% in early trading. On Stocktwits, BMNR retail sentiment remained in a “bearish” range over the past day, and the popularity of related discussions dropped from “normal” to “low.”

HYPE provides another example of increasing treasury holdings. He used Hyperliquid (HYPE) as an example. Lee claims that Hyperliquid's main treasury holds 14% of the token's supply and continues to buy. According to DeFilLama data, Hyperliquid Strategies (PURR) holds approximately 13.5% of HYPE's circulating supply.

“What happens when they hold 50% of the supply? I mean, HYPE is likely to rise in a parabolic manner,” Lee said.

Institutions may promote large-scale “rotation”

Lee added that most institutional investors still don't hold cryptocurrencies. He said that only about 2% of the institutions covered by Fundstrat have configurations. He added that Ethereum rose around 65% in the third quarter, while the S&P 500 remained essentially flat.

“I think there will be a massive rotation in the fourth quarter,” Lee said.

He also refuted claims that Ethereum is being overtaken by competing blockchains. Lee added that 99% of the tokenization projects being promoted by companies such as J.P. Morgan Chase (JPM) and BlackRock (BLK) are based on Ethereum. He claims that Ethereum has not lost any market share.

The price of Ethereum is trading around $2,670, falling more than 1% in the past 24 hours. On Stocktwits, ETH retail sentiment is still in the “bearish” zone, and discussions have been “normal” for the past day. According to platform data, the number of Ethereum followers increased by more than 15% in the past week.

ETH is down more than 10% this year so far, and 36% over the past 12 months.