Why Tom Lee says Ethereum is heading into 2026 ‘supercycle’ despite price down

Ethereum has had a spectacular year, so why is the price still down 40% from its August all-time high of $4,950?

Tom Lee, chairman of digital asset treasury firm Bitmine, blames the holiday slump.

“Market activity tends to slow as we enter the final holiday weeks of a calendar year,” Lee said.

“Year-end tax-loss related selling is pushing down crypto and crypto equity prices and this effect tends to be the greatest from 12/26 to 12/30, so we are navigating markets with this in mind,” he said.

Still, Ethereum trembling just below $3,000 is a far cry from the $7,500 end-of-year price predicted by the likes of Standard Chartered back in August.

Professional prognosticators had reason to be bullish on Ethereum. This year the network celebrated 10 years since its debut and successfully rolled out two major technical upgrades.

Wall Street king JP Morgan selected Ethereum for its first-ever tokenised money market fund, an asset class valued at $9 trillion by the Bank of International Settlements.

Meanwhile, corporate treasuries and exchange-traded funds are holding $20 billion worth of Ethereum.

Bitmine keeps buying

Despite the choppy waters, Lee remains bullish on Ethereum in the long-term and describes the current market paradigm as a “supercycle.”

Bitmine announced it purchased another $131 million in Ethereum on Monday. The haul adds to Bitmine’s $1.4 billion Ethereum buying spree in December alone.

“We continue to be the largest ‘fresh money’ buyer of Ethereum in the world,” Lee said.

Backed by premier institutional investors — including Peter Thiel’s Founders Fund and Cathie Wood’s ARK Invest — Bitmine now owns 3.4% of Ethereum’s circulating supply and is aiming for 5%.

That stash is worth just over $12 billion at time of reporting. The firm also plans to stake its Ethereum tokens to generate yield and projects staking will generate $374 million in annual income, or over $1 million per day.

Staking Ethereum tokens helps secure the network.

But at the moment, Lee’s conviction in a crypto “supercycle” is not supporting his firm’s share price. Bitmine stock has fallen over 50% since September.

Lee has long been one of the most ardent Ethereum bulls. In August, he called for $7,500 by year’s end and $25,000 by 2028.

To be sure, his bullishness comes as firms pivoting to becoming holders of cryptocurrencies are under pressure, with many of them being worth less than their underlying assets.

Wolfgang Münchau, the co-founder and director of Eurointelligence, said that setting up an investment business to buy assets like Bitcoin “in the hope that it would never fall below some imaginary ‘support level,’ this is downright stupid.”

“This is the oldest finance scheme in the book: borrow money to invest in a volatile, risky asset,” Münchau wrote in a column for DL News this week.

“It’s just dumb. It’s been done many times before.”