Fundstrat, the research director, and Bitmain, the chairman, stated that Ethereum may reach a new historical high this year and is expected to rise to $60,000 in the coming years.
Lee made the above statements during an interview with Coinage. In the interview, he discussed Ethereum's recent price performance, institutional demand, tokenization, and the broader crypto market.
Despite the Federal Reserve's interest rate hike in September, Ethereum still rose by about 80% from its low of nearly $1,500 in June, reaching around $2,700 in late September.
Tom Lee Ethereum is expected to reach new highs
Lee indicates that he expects the price of Ethereum to break through previous records and rise above $5,000 by the end of this year.
When asked whether Ethereum could reach a record high this year, Lee replied, "Absolutely possible." He also stated that Ethereum could rise to around $60,000 in the coming years. His estimate is partly based on previous price cycles of Ethereum.
Ethereum was below $100 at the end of 2018 and approached $4,900 in 2021. Lee indicates that a significant increase like this, following a long period of consolidation, could potentially push ETH up to $60,000.
"Is it possible for Ethereum to rise another 10 to 12 times from its previous high of $5,000? I think that's very likely," said Lee.
He added that Ethereum could rise to around $3,000 in the short term and far exceed $5,000 by the end of this year.
Ethereum still rose after the Fed raised interest rates
On September 16, the Federal Reserve raised its benchmark interest rate by 25 basis points, raising the target range to 3.75% to 4%. The decision was passed with 12 votes in favor and 0 votes against. Lee indicates that the market's reaction is important, as even with the interest rate increase, Ethereum and other crypto assets continued to rise.
Ethereum fell to around $1,500 in June, before rebounding to around $2,700 in late September. Lee believes that this trend indicates that the crypto market may have entered a new bull cycle.
He also believes that if inflation continues to decline, the Federal Reserve may eventually shift to a more neutral policy stance.
In August, core consumer prices rose by 2.4% year-on-year, lower than the 2.5% increase in July. Lee indicates that the remaining portion of inflation may be related to asset management fees and rising prices of flash memory used in technology products.
According to the analysis of their team, Lee believes that potential inflation may be closer to 2%.
Institutional funds are flowing into Ethereum.
Through US spot Ethereum ETF, Ethereum has also seen stronger demand. On September 22, US spot Ethereum ETF recorded a net inflow of $162.2 million, achieving positive inflows for the third consecutive day.
Among them, the Ethereum fund represented by BlackRock contributed $88.1 million, and the fund represented by Fidelity increased by $33.6 million. Lee indicates that this round of funding may attract a wider range of investors than previous crypto funding rounds.
He pointed out that tokenization, changes in crypto regulation, and the increasing use of blockchain technology by financial companies are all factors that could bring more investors into the market.
According to Lee, past encryption cycles were mainly driven by initial coin offerings (ICOs), NFT, meme coins, and stablecoins, among other specific areas. He believes that the current cycle has a broader range of potential use cases.
Tokenization may increase the utilization rate of Ethereum.
Lee indicates that financial institutions are paying increasing attention to blockchain technology in order to tokenize assets and create new financial products.
He stated that if blockchain can bring significant improvements in terms of operating costs, revenue generation, or customer experience, the company may adopt this technology.
Lee takes tokenized stocks as an example to illustrate this trend.
On September 17, the U.S. Securities and Exchange Commission (SEC) issued an innovation exemption that allows tokenized versions of certain U.S.-listed stocks to be traded on blockchain networks under this order.
This development occurred not long after Clarity Act failed to pass in the Senate with a vote of 49 to 50.
Lee also mentioned that traditional financial exchanges are planning to extend trading hours. NASDAQ has announced plans to extend trading hours to five days a week, nearly 23 hours a day, while the New York Stock Exchange has been approved to operate 22 hours a day.
Lee indicates that this change may bring the traditional market closer to the round-the-clock trading model adopted by the crypto market.
Robinhood is built on Ethereum.
Lee also emphasized that Robinhood has decided to build its Robinhood Chain on Ethereum.
According to the information discussed in the interviews, Robinhood Chain attracted $2.1 billion in tokenized assets in its first two months of operation, with $1.5 billion being deposited into applications running on that network.
Lee indicates that Robinhood chooses Ethereum for its security and liquidity, rather than just the transaction fees.
“I think Robinhood decided to build on Ethereum... because it is the safest chain and also the one with the strongest liquidity,” said Lee.
He believes that Ethereum does not necessarily need to capture all the fees generated by its upper-layer applications; ETH can still obtain value.
On the contrary, he believes that Ethereum is increasingly playing the role of an asset, with investors and companies holding it, while the network supports more financial applications.
