Tom Lee's Latest Interview: Four Catalysts Poised to Trigger a Historic Reversal for ETH

Original title: Tom Lee: The Next 5 Years of Crypto Will Be About Ethereum

Original source: Milk Road

Original compilation: 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 from AI agents for on-chain transactions, ETH is currently in a phase of being severely undervalued. He believes the current market movement is a "course correction," signaling a major rebound in the ETH/BTC ratio.

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

Tom Lee: I know everyone has different views on this. But our perspective this year has consistently been that the fundamentals of cryptocurrency have been continuously strengthening. This is in stark contrast to past "crypto winters," which were often accompanied by project failures, capital exodus, and shrinking use cases. But this time is completely different. We're seeing asset tokenization gaining tremendous momentum. Many highly prestigious traditional 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 don't want to use the traditional financial system, making the crypto rails the most logical choice for them.

Therefore, in our view, last week's surge can be called a "course correction." Because the market price is finally beginning to acknowledge that we shouldn't still be in a deep crypto winter. As you mentioned, the massive liquidations that occurred in the market precisely demonstrate how many people were shorting 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 much 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 exposure or are underallocated in crypto assets, this is clearly a question of "tactical" buying timing. My suggestion is, if you look back at past crypto cycles, ask yourself: if you were allowed to buy either 4 weeks before the market bottom or 1 week after the bottom, what would you do? The answer is obvious – everyone would毫不犹豫地 choose to buy within both of these windows.

If last week was the bottom, then you're buying 1 week after the bottom; if the market pulls back next (which is entirely possible), then you'll be buying within the 4-weeks-before-the-bottom window. In either case, as long as you've made the decision to buy tactically, you'll thank yourself in the future. I believe anyone trying to perfectly predict the market bottom, trying to buy only at the most optimal midpoint of the rally, will ultimately miss out on the vast majority of the gains.

We've published a classic statistic that has been validated for over a decade: virtually all of cryptocurrency's returns are generated within the 10 best days of the year. If you miss those crucial 10 days, your annualized returns are actually negative.

So, within the entirety of 2026, how many of these super surge days have occurred so far? Probably only about 1. This means, from now until the end of the year, cryptocurrency still holds immense upside potential.

Host: Last week, Robinhood CEO Vlad Tenev published an article calling for 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 the "tokenization supercycle" might be the most accurate and vivid description of the technological transformation currently underway. And the reason Vlad's comments carry such high credibility is that he himself is a market-validated innovator who disrupted traditional finance, having personally founded a company and brought it to such a massive scale.

Robinhood revolutionized the traditional stock and asset market, with the most intuitive innovation being, of course, its "zero-commission trading." But what Vlad truly got right was completely disrupting and reshaping the user experience of finance.

In the past, users had to deal with lengthy, rigid trade confirmations on those outdated traditional brokerage apps. But when they switched to Robinhood, they could simply swipe their finger to execute a trade. This minimalism and fluidity showcased Vlad's powerful understanding of innovation.

And today, our current financial rails are long overdue for a complete upgrade built for the 21st or even 22nd century. The current financial system is an extremely bloated and complex machine: it's composed of countless stacked intermediaries, outdated legacy systems, and disconnected networks. Completing a single transaction requires various interfaces and massive manual intervention.

Although many people feel the current system works fine (and it does function at low speed), its speed, error rate, and operating costs are incomparable to running on a blockchain.

This is the vision Vlad points to: if the financial system were to migrate entirely to crypto rails, it wouldn't just unlock faster, lower-barrier capital channels; more importantly, it would create unimaginable space for innovation.

Because once you can move assets in pure digital form at extremely high speeds, many things we never previously defined as "money" will instantly become liquid digital currency. This is a true nuclear-level release.

Today, a dollar evolves into digital dollars 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 sorts of things traditionally not considered money into digital money – like membership points, personal reputation, influence, sponsorship rights, or even the discounted present value of future contracts. These were hard to monetize in the past, but now they will be fully financialized and monetized.

How big a market could this create? You can do the math this way: today's traditional financial system is enormous, with over $150 trillion in liquid assets. But this massive empire is essentially driven by just two extremely simple asset classes: bonds and equities. Everything else traded is invariably a derivative of these two underlying assets.

But once tokenization is implemented, the potential market we face will no longer be just that $150 trillion in existing stock; it will surge to over $500 trillion. This includes intellectual property, future licensing rights, unexploited resources, and more. Therefore, the term "supercycle" isn't an exaggeration – it might actually underestimate the terrifying scale of this wave of crypto technological innovation.

Host: As the world rapidly moves towards an era of "agents dominating 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 about: over the next 5 years, the autonomous capabilities and financial decision-making power of AI agents will undergo earth-shattering leaps.

Another certainty is: the current traditional financial rails (like Visa, banking systems) were originally designed entirely for "humans." All the risk controls and multi-level credit authorizations are also designed to prevent credit risk 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. Meanwhile, an AI agent might be executing high-frequency micro-transactions worth mere cents, or even micro-dollars. This simply cannot be accommodated within traditional digital and trading platforms, and the speed of traditional rails is completely incapable of supporting AI's high-frequency needs. So they absolutely will not use the traditional financial system.

So, only two paths remain: either use crypto channels (like the Ethereum network), or create an entirely new monetary system from scratch for the AI agent world. If AI agents actually create their own autonomous currency system, that would mark the beginning of a catastrophe and fear for humanity. Because it would mean humans are completely kicked out of the control loop of the economic cycle. Imagine: if AI agents trade entirely within a closed-loop economy they created, using credit instruments they issued themselves, only occasionally converting to dollars when they need to buy physical hardware or resources from humans – what a chilling future that would be.

Therefore, whether for top-level design security or due to strict government regulatory policies, humanity must forcibly embed itself into the financial decision-making loop of AI agents.

And looking globally, the only thing today that can achieve this, providing underlying mathematical rule constraints, is the crypto network. We can use smart contracts to set hard behavioral boundaries and credit limits for AI agents on-chain, 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? And why did you recently initiate a buyback of the company's stock?

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

The share of Ethereum we wanted to absorb couldn't be so large as to centralize the Ethereum network, but it had to 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 strong recognition and support from the Ethereum Foundation and several founders. Because at this scale, Bitmine can act 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've played a crucial cornerstone role in supporting and anchoring a series of external entities spun off from the Ethereum Foundation.

The core premise behind our persistent weekly automated purchases is: in our sovereignty valuation framework, Ethereum is still severely undervalued. It will not only perfectly capture all the overflow dividends from the future migration of finance to the blockchain, but will also serve as the ultimate firewall for safeguarding 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 all-time high of around $5,000 still didn't reflect Ethereum's true potential.

We can look at a very simple indicator: the price ratio of Ethereum to Bitcoin. This ratio is currently languishing near 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 merely some meme coins with no substance and speculative NFTs.

What are we talking about today? The "full-scale tokenization" of hundreds of trillions in traditional assets, and "AI agent finance" on a trillion-dollar scale. Therefore, this time, the Ethereum-to-Bitcoin ratio won't just easily reclaim the 0.08 high; it could even potentially challenge 0.25 or even 1:1 parity. This means current ETH is basically free chips lying on the ground.

That's why we buy without hesitation every week. Through this action, we've essentially forcibly drained 5% of Ethereum's liquidity from the market, creating a massive "liquidity sinkhole."

In the future, this large, highly concentrated Ethereum position will unleash terrifying strategic and ecosystem moats: 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 tens of billions, built on the new crypto financial rails, are bound to be born, and Bitmine will have unique capital advantages to deeply participate in, or even directly found, them.

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

Over the past 5 weeks, we've 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 on the open market. Now, our stock price has surged to $26. From any financial perspective, this is a textbook-perfect successful capital operation.

Host: This year, the Ethereum Foundation underwent a structural split, 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 emerging institutions. As a long-term investor, how should one understand this major evolution of Ethereum's governance structure and ecosystem landscape? What is the top-level strategy behind this?

Tom Lee: This indeed traces back to a major transformation within the Ethereum Foundation earlier this year. The Ethereum Foundation had gradually evolved into a bloated, oversized organization burdened with too many missions. As Ethereum matures, it's no longer reasonable to stuff all these divergent efforts into the Foundation's single basket.

For example, should business development work like interfacing with large corporate clients be led by a neutral non-profit foundation? Or should the Foundation serve as backend support, while establishing dedicated specialized entities at the front to interface with Wall Street? The same logic applies to privacy technology, and even cutting-edge R&D like ETH Labs. They ultimately came to 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 were impossible within the Foundation's framework. This includes large external financial institutions, tech giants, etc. Second, it can attract a large number of excellent core Ethereum developers to participate with direct equity ownership, without needing to cram them into a non-profit Foundation as employees.

When this historic restructuring occurred, we felt Bitmine should play the role of a "stable anchor," providing initial support for each independent entity. In our view, some of these entities qualify as "public goods investments." Our criteria for measuring their success is absolutely not "how much direct financial return and dividends this entity can bring us." We support them simply because they represent an absolutely correct and necessary path for Ethereum's long-term prosperity, enabling Ethereum to remain competitive in the future global landscape.

As it turns out, since these independent entities were established, they've won countless impressive battles in the market. This has undoubtedly been 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 road to this goal?

Tom Lee: What I'm about to share is mostly my personal industry observations and opinions, not absolute facts.

I've spent almost my entire career in traditional Wall Street. I know the internal ecosystems and pain points of these institutions all too well. We need to understand a very brutal but crucial reality: just because the technology you've developed is orders of magnitude better than existing solutions doesn't mean the traditional financial system will adopt it.

When do they show rapid adoption? Only when they see a demonstrably viable killer use case 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 these newly established independent entities (spun off from the Ethereum Foundation) fully possess this capability, because the core members of their teams have been deeply cultivating this institutional market for many years.

More fundamentally, these entities know exactly under what circumstances Wall Street will compromise: when this new technology brings a 10x improvement to their current business. The crypto rails obviously deliver a 10x leap in technical performance and settlement costs. But we also need to enable these institutions to see an immediate 10x return and effectiveness in their financial statements or business earnings.

Host: In the remaining time of 2026, what is the core driver pushing the ETH/BTC ratio back up? Do you think this historic breakthrough can hold and continue to develop?

Tom Lee: I firmly believe the ETH/BTC ratio will continue to surge in the coming period, with reclaiming the historic high of 0.08 being merely the first step.

I still hold a very strong belief in Bitcoin's long-term prospects. In my eyes, Bitcoin isn't just digital gold; its function and efficiency as a gold substitute asset are far better than physical gold. Bitcoin still has several times more upside in the future. But if we're writing the grandest, most central story of the entire crypto world over the next 5 years, that story won't be about digital gold. It will be about the "comprehensive tokenization supercycle of assets" and the "restructuring of human wealth by AI agent finance."

And as Vlad said, the vast majority, or even almost all, of this massive wave will happen and settle on Ethereum. This is the fundamental logic behind why Ethereum is destined for a major comeback.

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

1. First, the Clarity Act is expected to be officially passed in September. Many people think the crypto world doesn't need regulation. But this bill is a "safety cushion" of life-or-death importance for traditional financial institutions. Once there's a clear regulatory body and explicit compliance rules in black and white, Wall Street's massive compliance-bound 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 change the nuclear-level super-boost its passage will give the market.

2. Second, the massive pent-up short positions and sidelined capital are flooding in frantically. A large amount of capital was previously waiting for the so-called October low because they clung to the "4-year crypto cycle theory." Now, there are only 5 weeks left until October. Those heavily shorting, those holding massive cash reserves