Tom Lee: Four Catalysts to Drive ETH Higher This Year

Source: "The Milk Road Show"

Compiled by: Felix, PANews

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

PANews has compiled the highlights of the interview.

Host: What are your thoughts on last week's market movements and this surge in Ethereum?

Tom Lee: I know everyone has different opinions on this. But our view this year has been consistent: the fundamentals of cryptocurrency have been continuously strengthening. This is in stark contrast to past "crypto winters." Past crypto winters were often accompanied by project failures, capital flight, and shrinking use cases. But this time is completely different. We are seeing asset tokenization gaining tremendous momentum. Many highly reputable traditional large financial institutions are building tokenized products, with a particular preference for the Ethereum platform. Additionally, as AI capabilities grow, there are increasing signs that AI agents simply do not want to use the traditional financial system, so crypto rails are the most logical choice for them.

Therefore, in our view, last week's surge can be called a "course correction." Because market prices are finally beginning to acknowledge that we should no longer be in a deep crypto winter. As you mentioned, the massive liquidations that occurred in the market precisely illustrate how many people were short and completely wrong. As the famous John

Russell said: "All rallies begin with short covering." So we believe this is just the beginning of a larger move.

Host: Do you think a pullback will occur? Or has this completely kicked off a new crypto bull market?

Tom Lee: I think for those who currently have no crypto exposure or are under-allocated, this is clearly a "tactical" timing question. My advice is, if you look back at past crypto cycles, ask yourself one question: if you were allowed to buy in the 4 weeks before the market bottom or 1 week after the bottom, what would you do? The answer is obvious—everyone would without hesitation choose to buy within those two windows.

If last week was the bottom, then you are buying 1 week after the bottom; if the market pulls back from here (which is entirely possible), then you will be buying within the 4 weeks before the bottom. Either way, as long as you make the tactical decision to buy, you will thank yourself in the future. I believe anyone who tries to perfectly predict the market bottom and buy only 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: nearly all of cryptocurrency's gains are made in the 10 best days of the year. If you miss those 10 critical days, your annualized return is actually negative.

So, in all of 2026, how many such super surge days have occurred so far? Probably only 1 day. This means that from now until the end of the year, cryptocurrency still holds tremendous upside potential.

Host: Last week, Robinhood CEO Vlad Tenev published an article calling attention to the "tokenization supercycle." How do you view this tokenization supercycle? What does it mean, and how will it change the financial markets as we know them today?

Tom Lee: I think "tokenization supercycle" may be the most precise and vivid description of the technological transformation happening right now. And Vlad's remarks carry extremely high credibility because he is a market-validated innovator who disrupted traditional finance, having founded and built a company to such a massive scale.

Robinhood brought a disruptive revolution to traditional stock and asset markets, with the most intuitive innovation being its "zero-commission trading." But what Vlad really got right was completely disrupting and reshaping the user experience of finance.

In the past, users on those old traditional brokerage apps had to deal with lengthy and rigid trade confirmations; when they switched to Robinhood, they could complete a trade with a simple swipe of a finger. This minimalism and fluidity demonstrated Vlad's strong innovative understanding.

And today, our current financial underlying rails are long overdue for a thorough upgrade for the 21st and even 22nd century. Today's financial system is an extremely bloated and complex machine: it consists of countless stacked intermediaries, outdated legacy systems, and non-interoperable networks. Completing a transaction requires various interfaces and massive manual intervention.

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

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

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

Today, a dollar has evolved into a digital dollar by becoming a stablecoin; stocks are also evolving into "software" running on blockchains through tokenization. And once you turn stocks and currencies into software, we can convert all other things that traditionally never belonged to money into digital money, such as loyalty points, personal reputation, influence, sponsorship rights, and even the discounted value of forward contracts. They were hard to monetize in the past, but now they will be completely financialized and monetized.

How big a market can this create? You can do the math: 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 narrow asset classes: bonds and stocks. All other financial products traded are, without exception, derivatives of these two base assets.

And once tokenization is implemented, the potential market we face will no longer be just that $150 trillion stock; it will soar to over $500 trillion. This includes intellectual property, future licensing rights, unmined resources, and more. Therefore, the term "supercycle" is not an exaggeration; it may even underestimate the terrifying scale of this wave of crypto technological innovation.

Host: As the world rapidly moves toward an era where "agents dominate everything on-chain," how does 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 full of uncertainty. One thing we can be absolutely certain of is: in the next 5 years, the autonomous capabilities and financial decision-making power of AI agents will undergo earth-shaking leaps.

Another certainty is: the current traditional financial underlying channels (such as Visa, banking systems) were originally designed entirely for "humans," with all risk controls and multi-level credit approvals intended to prevent credit risks in human-to-human transactions. They simply cannot adapt to the economic activities of AI agents.

But how could an AI agent swipe a physical Visa card? A traditional payment swipe goes through 24 different systems for verification, while an AI agent might be executing high-frequency micro-transactions worth only cents or even micro-cents. This cannot be accommodated in traditional digital and transaction systems, and the speed of traditional rails cannot support AI's high-frequency needs. So they absolutely will not use the traditional financial system.

Then, only two paths remain: either use crypto channels (such as the Ethereum network), or create a brand-new monetary system belonging to the AI agent world from scratch. If AI agents really create their own autonomous monetary system, that would be the beginning of a disaster and fear for all humanity. Because it would mean humans are completely kicked out of the control chain of the economic loop. Imagine if AI agents trade entirely within their own closed-loop economy, using their own issued credit medium, and only reluctantly convert to dollars when they occasionally need to buy physical hardware or resources from humans—what a chilling future that would be?

Therefore, whether from the perspective of top-level design security or government hard regulatory policies, humans must forcibly embed themselves into the financial decision-making loop of AI agents.

And globally, the only thing that can achieve this today, providing underlying mathematical rule constraints, is the crypto network. We can use smart contracts on-chain to set hard behavioral boundaries and credit limits for AI agents, thereby giving them financial autonomy while completely eliminating the systemic risk of them running away with funds.

Host: Why do you buy ETH every week without fail? Why did you recently start a stock buyback?

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

The share of Ethereum we aim to absorb must not be too large, to avoid centralizing the Ethereum network, but must be large enough for us to enjoy the massive network value gains. After precise calculation, 5% is the perfect golden balance point.

This goal has also received high recognition and support from the Ethereum Foundation and several founders. Because at this scale, Bitmine can serve as an extremely strong "market stabilizer" for the entire Ethereum network, while also guiding and empowering the ecosystem's development in a healthy manner. For example, we played an extremely important cornerstone role in supporting and anchoring a series of external entities spun off from the Ethereum Foundation.

The core premise of our unwavering weekly dollar-cost averaging is: in our sovereign valuation system, Ethereum is still severely undervalued. It will not only perfectly capture all the spillover dividends of future financial migration to blockchain, but will also serve as the ultimate firewall for protecting human wealth and regulating AI agent behavior.

So, what valuation should this give Ethereum? For us, Ethereum's intrinsic present value is far higher than today's $2,500. Even the previous historical high of around $5,000 still does 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 2021 bull market, this ratio reached 0.08. But remember: the underlying driver of that 2021 boom was just some air meme coins and speculative NFTs.

And what are we talking about today? It's the "full tokenization" of trillions in traditional assets, and "AI agent finance" at the trillion scale. Therefore, this time the Ethereum-to-Bitcoin exchange rate will not only easily reclaim the 0.08 high ground, but may even reach 0.25 or even 1:1 parity. This means current ETH is essentially free chips on the ground.

That's why we buy every week without hesitation. Through this action, we have effectively drained 5% of Ethereum's liquidity from the market, forming a massive "liquidity sedimentation black hole."

In the future, this huge, highly concentrated Ethereum position will unleash extremely terrifying strategic and ecosystem moats: it can be used as seed capital to incubate and encourage a large number of DeFi frontier innovations; in the upcoming next crypto cycle, dozens of unicorn companies valued at tens of billions, built on brand-new crypto financial rails, will inevitably emerge, and Bitmine will have unique capital advantages to deeply participate in, or even directly found them.

As for the stock buyback you mentioned. We previously passed a buyback authorization of up to $4 billion for common stock. When the buyback first started, this amount was even enough to buy 50% of the company's outstanding shares. The core original intention of our buyback is to prevent our company's stock price from excessively deviating from the company's fundamental value (i.e., the Ethereum net value per share). When we initiated this program, we found that BMR's stock price was very attractive, and by buying back and retiring shares, we can substantially increase the amount of Ethereum anchored per share.

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

Host: The Ethereum Foundation underwent a structural split this year, evolving into more external organizations with clear functions and independent operations, such as ETH Labs, ETH Systems, and Ethereum Institutional. And Bitmine is almost the cornerstone supporter of all these new entities. As a long-term investor, how should one understand this major evolution in Ethereum's governance architecture and ecosystem landscape? What is the top-level strategy behind it?

Tom Lee: This indeed goes back to a major internal transformation within the Ethereum Foundation earlier this year. The Ethereum Foundation had gradually evolved into a massive, bloated organization burdened with too many missions. As Ethereum matures, it no longer makes sense to cram all these diverse efforts into the single basket of the Foundation.

For example, should business development work like engaging with large enterprise clients be led by a neutral non-profit foundation? Or should the Foundation serve as back-end support while a dedicated entity is set up at the front end to interface with Wall Street? The same logic applies to privacy protection technology, and even frontier technology R&D like ETH Labs. They ultimately made a very wise conclusion: these functions should be spun off into dedicated operating entities outside the Foundation. This brings two huge strategic advantages:

First, it enables external collaborations that cannot be achieved within the Foundation framework. This includes external large financial institutions, tech giants, etc. Second, it can attract a large number of excellent Ethereum core developers to directly hold equity and participate, without having to be squeezed into the non-profit Foundation as employees.

When this historic reorganization occurred, we believed Bitmine should play the role of a "stabilizing anchor," providing initial support to each independent entity. In our view, some of these entities are "public goods investments." Our measure of success is by no means "how much direct financial return and dividends this entity can bring us." We support it simply because it is an absolutely correct and necessary path for Ethereum's long-term prosperity, enabling Ethereum to remain invincible in future global competition.

As it turns out, since the establishment of these independent entities, they have won numerous 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 hurdle on the path to this goal?

Tom Lee: Most of what I'm about to share are my personal industry observations and opinions, not absolute facts.

My entire career has been spent in traditional Wall Street. I know the internal ecosystem and pain points of these institutions all too well. We need to understand a very cruel but critical reality: just because the technology you developed is orders of magnitude better than existing solutions does not mean the traditional financial system will adopt it.

When will they show rapid adoption? Only when they see a proven killer application with a clear return on investment.

Traditional institutions prefer to deal with organizations that can fully understand and meet their compliance and business needs. I believe the newly established independent entities (spun off from the Ethereum Foundation) fully possess this quality, because their core team members have been deeply cultivating this institutional market for many years.

More critically, these entities know exactly when Wall Street will compromise: that is when the new technology can bring a 10x improvement to their current business. Crypto rails clearly bring a 10x leap in technical performance and settlement costs. But we must also enable these institutions to immediately see 10x returns and results in their financial statements or business earnings.

Host: In the remainder of 2026, what are the core drivers for ETH/BTC to return? Do you think this historic breakout can hold and continue to develop?

Tom Lee: I firmly believe that the ETH/BTC ratio will continue to soar in the coming period, and reclaiming the historical high of 0.08 is only the first step.

I still hold extremely strong conviction in Bitcoin's long-term prospects. In my eyes, Bitcoin is not just digital gold; its function and efficiency as a gold substitute asset are far better than physical gold. Bitcoin still has multiple times of upside potential in the future. However, if we are to write the grandest, most core story of the entire crypto world over the next 5 years, that story will not be about digital gold, but about the "supercycle of comprehensive asset tokenization" and "the restructuring of human wealth by AI agent finance."

And as Vlad said, the vast majority, even almost all, of this super wave will occur and settle on Ethereum. This is the underlying logic of Ethereum's inevitable major comeback.

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

First, the "Clarity Act" is expected to officially pass in September. Many people think the crypto world doesn't need regulation. But this act is a life-or-death "safety cushion" for traditional financial institutions. Once there is a clear regulatory body and black-and-white compliance rules, Wall Street's massive compliant capital can legally and formally establish trillion-dollar businesses on crypto rails. Even if it doesn't pass, the crypto industry has already proven it can innovate crazily without regulation, but that doesn't diminish the nuclear-level super boost it will bring to the market upon passage.

Second, the long-suppressed massive short positions and sidelined capital are flooding in frantically. A large amount of capital had been waiting for the so-called October low due to adherence to the "crypto four-year cycle theory." And now, there are only 5 weeks left until October. Those who were frantically shorting, holding huge cash, and those who left to speculate on AI concept stocks are suddenly waking up: cryptocurrency is essentially the most core settlement landscape downstream of the AI boom.

Third, the strong return of international capital, led by Asia. Asian markets like South Korea previously chased local stock markets frantically, and now they are rapidly shifting their attention back to crypto assets.

Fourth, the performance competition among global top financial institutions. This is a cold statistical fact: since June 30 this year, the most eye-catching asset globally is none other than cryptocurrency. Ethereum surged 54% during this period, while gold only rose 13%, and US stocks had only single-digit gains. Imagine when the quarterly settlement comes on September 30, if Ethereum still ranks first among global major asset classes in returns, then in the entire fourth quarter from September 30 to December 30, global fund managers will erupt in a frenzy of FOMO-driven forced buying and position chasing to avoid underperforming peers.

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