Original title: Tom Lee: The Next 5 Years of Crypto Will Be About Ethereum
Original source: Milk Road
Original compiled: Felix, PANews

Bitmine chairman Tom Lee recently appeared on the (Milk Road Show) program to discuss Ethereum’s core position in the financial system over the next five years. Tom Lee said that due to the tokenization trend and the demand from AI agents for on-chain transactions, ETH is currently in a severely undervalued stage. He believes the current market is in a “course correction,” signaling that the ETH/BTC ratio is set for a major rebound.

Host: What’s your take on last week’s market performance and this sudden surge in Ethereum?

Tom Lee: I know everyone has different views on this. But our view this year has been consistent: crypto’s fundamentals have continued to strengthen. This is sharply different from the past “crypto winters.” In past crypto winters, project failures, capital leaving, and shrinking application scenarios often went along with them. But this time is completely different. We’re seeing asset tokenization gain enormous momentum. Many highly reputable traditional large financial institutions are building tokenized products, and they particularly favor the Ethereum platform. In addition, as AI capabilities grow, more signs indicate that AI agents basically don’t want to use traditional financial systems—so crypto rails are the most reasonable choice for them.

Therefore, in our view, last week’s surge can be called a “course correction.” Because the market price finally started to acknowledge that we shouldn’t still be stuck in a deep crypto winter. As you said, the massive liquidations happening in the market are precisely evidence of how many people were shorting and got it completely wrong beforehand. As the famous John Russell said: “All rebounds begin with the covering of shorts.” So we think this is just the beginning of a larger bull market.

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

Tom Lee: I think for people who currently have no exposure to crypto assets or are under-allocated, this is obviously a “tactical” buying opportunity. My advice is: if you look back at past crypto cycles and ask yourself a question—if you were allowed to buy either during the first four weeks around the market bottom or in the first week after the bottom, what would you do? The answer is obvious: everyone would choose to buy within those two windows without hesitation.

If last week was the bottom, then you’re buying one week after the low. If the market then pulls back next (which is completely possible), you’ll be buying in the four-week range before the low. No matter which situation you face, as long as you make a tactical decision to buy, you’ll genuinely thank yourself in the future. I believe anyone trying to perfectly predict the market bottom—and trying to buy in right in the middle of a rebound—will ultimately miss out on the vast majority of gains.

We’ve published a classic statistical dataset that has been validated for more than ten years: nearly all returns of cryptoassets are achieved within the best 10 days of the year. If you miss these most critical 10 days, your annualized return is actually negative.

So during all of 2026, how many days like these—super-spike days—will there be? Roughly only one day. That means from now until the end of this year, crypto still contains huge upside potential.

Host: Last week, Robinhood CEO Vlad Tenev published an article calling for attention to the “tokenization supercycle.” What’s your take on this tokenization supercycle? What does it mean, and how will it change the financial markets we know today?

Tom Lee: I think “the tokenization supercycle” may be the most precise and vivid way to describe the technological transformation happening right now. And Vlad’s remarks have such high credibility because he himself is a market-validated innovator who has disrupted traditional finance—he founded it and personally grew a company to such a massive scale.

Robinhood brought a disruptive revolution to traditional stock and asset markets, and the most intuitive innovation is of course the “zero-commission trading” it offers. But what Vlad truly did right was to thoroughly disrupt and reshape the user experience of finance.

Back then, on those old-fashioned traditional brokerage apps, users had to deal with long, rigid trade confirmation slips; but when they switched to Robinhood, all it took was a swipe of a finger to complete the trade. That minimalist and smooth presentation reflected Vlad’s powerful understanding of innovation.

And today, our current underlying financial operating rails should have already undergone a thorough upgrade aimed at the 21st century—and even the 22nd. Today’s financial system is an extremely bloated and complex machine: it’s made up of countless layers of intermediaries, outdated legacy systems, and networks that can’t communicate with one another. To complete a single transaction, various interfaces must be connected and there must be massive amounts of manual intervention.

Although many people think the current system runs pretty well (and indeed it can keep operating 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 entire financial system migrates wholesale onto crypto rails, it won’t only unlock faster, lower-barrier channels for moving capital; more importantly, it will create innovation space that’s hard to imagine.

Because once you can move assets in a purely digital form, at extremely high speed, many things that we’ve never defined as “money” before instantly become tradable digital currencies. That’s the true energy-nucleus-level release.

Today, one dollar evolves into digital dollars by becoming a stablecoin; stocks are also evolving through tokenization into “software” that runs on a blockchain. And once you turn stocks and money into software, we can convert other things that have traditionally never belonged to money into digital money as well—such as membership points, personal reputation, influence, sponsorship rights, and even the discounted present value of forward contracts. These have been difficult to liquidate in the past, but now they will be fully financialized and monetized.

How big a market can this create? You can do the math like this: today’s traditional financial system is extremely large, with more than $150 trillion in liquid assets. But such a massive empire is essentially driven by only two extremely singular asset classes: bonds and stocks. Everything else traded in financial products is—without exception—derivatives of these two base assets.

And once tokenization is implemented, the potential market we face will no longer be only that $150 trillion of existing stock; it will skyrocket to more than $500 trillion. This includes intellectual property, future licensing rights, untapped resources, and more. Therefore, the term “supercycle” not only isn’t an exaggeration—it may even underestimate the terrifying scale of this wave of crypto technological innovation.

Host: As the world quickly moves into the era of “everything on an agent-led chain,” how can Ethereum maintain and continue to expand its absolute dominance in this ecosystem?

Tom Lee: When it comes to the future, some things we can be 100% sure about, and other things are full of uncertainty. The absolute thing we can be certain of is that in the next five years, AI agents’ autonomy and financial decision-making power will leap forward in a massive, game-changing way.

Another thing we can be certain about is this: the current underlying traditional financial rails (such as Visa and banking systems) were designed entirely for “humans,” and all their risk controls and multi-level credit grants are meant to protect against credit risk when people transact with one another. They simply can’t adapt to the economic activities of AI agents.

But how could AI agents possibly “swipe a Visa physical card”? When you swipe a card in traditional payments, it has to go through 24 different systems to validate back and forth. Meanwhile, AI agents may be executing high-frequency micro-transactions worth just cents—or even only micro-dollars—transactions that traditional digital and trading platform systems simply can’t accommodate, and the speed of traditional rails can’t support AI agents’ high-frequency needs either. That’s why they absolutely won’t use the traditional financial system.

So there are only two paths left: either use crypto rails (such as the Ethereum network), or invent entirely new monetary systems out of thin air for the AI-agent world. If AI agents really created their own autonomous currency system, that would mark the beginning of disaster and fear for all of humankind—because it would mean humans are completely kicked out of the control chain governing the economic cycle. Just imagine what the future would be like if AI agents traded entirely within closed-loop economies they created themselves, using credit instruments they issued, and only reluctantly converting to dollars when they occasionally needed to buy physical hardware or resources from humans.

Therefore, whether from a top-level design perspective focused on safety or due to the government’s strict regulatory policies, humans must be forcibly embedded into the financial decision-making closed loop of AI agents.

And looking globally, the only thing that can make this possible today—and provide the underlying mathematical rules that constrain it—is crypto networks. We can use smart contracts to set hard behavioral boundaries and credit limits on-chain for AI agents, giving them financial autonomy while completely eliminating the systemic risk of them running off with funds.

Host: Why buy ETH every single week, no matter what? And why has there recently been an initiative to repurchase shares of company stock?

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

We want to attract our target share of Ethereum: it can’t be too large to avoid causing centralization in the Ethereum network, yet it must be large enough for us to benefit from the enormous value of the network. After precise calculations, 5% is the perfect golden balance point.

This goal has also been highly recognized and supported by the Ethereum Foundation and several of its founders. At this scale, Bitmine can serve as an extremely powerful “market stabilizer” for the entire Ethereum network, while also guiding and empowering the development of the whole ecosystem in a healthy way. For example, when we help with and anchor a series of external entities spun out from the Ethereum Foundation, we play an extremely important foundational role.

The reason we persist with weekly dollar-cost averaging is most fundamentally because, within our sovereign valuation framework, Ethereum is still being severely undervalued. Not only will it perfectly capture all spillover benefits as future finance migrates to blockchains, but it will also serve as the ultimate firewall guarding human wealth and regulating AI agents’ behavior.

So what kind of valuation should this bring to Ethereum? For us, Ethereum’s intrinsic present value is far higher than today’s $2,500. Even the previous historical peak around $5,000 still hasn’t reflected Ethereum’s true potential.

We can look at a very simple indicator: the price ratio between Ethereum and Bitcoin. Right now, that ratio is depressed around 0.03. In the peak of the 2021 bull market, that ratio reached 0.08. But remember: in that boom in 2021, the underlying driving force was only some air-dropped Meme coins and speculative NFTs.

So what are we talking about today? It’s the wholesale “tokenization of the entire slate” of assets worth many millions of billions of dollars—along with “AI-agent finance” on a trillion-dollar scale. Therefore, this time, the ETH-to-BTC exchange rate won’t just easily reclaim the high ground of 0.08—it may even fully challenge parity levels of 0.25 and even 1:1. That means today’s ETH is essentially like a pile of chips handed to you for free.

That’s why we buy without hesitation every week. Through this action, we have effectively drained 5% of Ethereum’s liquidity from the market, forming a massive “liquidity sinkhole.”

In the future, this huge, high-concentration Ethereum position will unlock extremely formidable strategic and ecosystem barriers: it can be used as seed funding to incubate and encourage a large number of DeFi frontier innovations; in the next crypto cycle that’s coming, dozens of unicorn companies valued in the billions are sure to emerge, built on a brand-new crypto financial rail—and Bitmine will have unique capital advantages to participate deeply, or even directly found them.

As for the stock buybacks you mentioned: we previously passed a share repurchase authorization as high as $4 billion. When the buyback just started, that amount of capital could even buy up 50% of the company’s outstanding shares. Our core intent in setting up the buyback program was to prevent our company’s stock price from becoming excessively detached from the company’s fundamental value (i.e., the net Ethereum value represented per share). When we initiated this program, we found BMR’s stock price was very attractive. By buying back and retiring the shares, we can practically increase the amount of Ethereum that each share is anchored to.

In the past five weeks alone, we carried out the largest stock buyback in the entire history of the crypto industry: at an average price below $15, we accumulated nearly 20 million shares of company stock in the public market. Now our share price has surged to $26. From any financial perspective, this is a textbook-level success in capital operations.

Host: This year, the Ethereum Foundation conducted a structural split, evolving into more clearly defined, independently operating external organizations, such as ETH Labs, ETH Systems, and Ethereum Institutional. And Bitmine is essentially a cornerstone supporter of nearly all these new entities. As a long-term investor, how should we understand this major evolution of Ethereum’s governance architecture and ecosystem map? What is the top-level strategy behind it?

Tom Lee: This definitely goes back to a major shift that occurred earlier this year within the Ethereum Foundation. The Ethereum Foundation had already gradually evolved into an enormous, bloated organization burdened with too many missions. As Ethereum matured, putting all these efforts with different directions into that single foundation “basket” no longer made sense.

For example, should business development work like connecting with large enterprise clients be led by a neutral, nonprofit foundation? Or should the foundation act as behind-the-scenes support, while independently setting up a dedicated entity on the front end to connect with Wall Street? The same logic applies to privacy-preserving technologies, even cutting-edge R&D like ETH Labs. In the end, they reached a very wise conclusion: these functions should be separated out, and dedicated operating entities should be established outside the foundation. This brings two major strategic advantages:

First, it enables external collaboration that cannot be achieved within the framework of a foundation. This includes external large financial institutions, tech giants, and so on. Second, it can attract a large number of excellent Ethereum core developers to participate with direct equity stakes—without having to stuff them into a nonprofit foundation as employees.

When this historical restructuring happens, we believe Bitmine should play a role as a “stability anchor,” providing initial support for each independent entity. In our view, some of these entities fall under “public goods investment.” We measure their success by standards that are absolutely not “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—one that will allow Ethereum to stand undefeated in future global competition.

As it turned out, since these independent entities were established, they have won countless impressive battles in the market. There’s no doubt this has been a huge success.

Host: From your perspective, how can Ethereum begin to turn the vision into reality? What do you think is the biggest next hurdle on the road to achieving that goal?

Tom Lee: Most of what I’m about to share is my personal industry observations and viewpoints, and it doesn’t represent absolute facts.

My entire career has almost entirely been spent in traditional Wall Street. I know these institutions’ internal ecosystems and pain points extremely well. We need to understand a brutally harsh but crucial reality: just because the technology you developed surpasses existing solutions by an order of magnitude doesn’t mean the traditional financial system will adopt it.

When will they show rapid adoption? Only when they see killer application scenarios that truly work in practice, with clear investment returns.

Traditional institutions would rather deal with organizations that can fully understand and meet their compliance and business needs. I believe these newly established independent entities (the entities spun out from the Ethereum Foundation) absolutely have this caliber, because the core members of their teams have been deeply focused on this kind of institutional market for many years.

More fundamentally, these entities know exactly under what conditions Wall Street will compromise: when this new technology can deliver a 10x improvement to their current businesses. Crypto rails clearly bring a 10x leap in technical performance and settlement costs. But we also need to ensure that these institutions can immediately see the 10x returns and effectiveness reflected in their financial statements or business results.

Host: In the remainder of 2026, what is the core driving force behind ETH returning to a higher BTC ratio? Do you think this historic breakthrough can hold steady and keep compounding?

Tom Lee: I firmly believe the ETH-to-BTC ratio will continue to surge over the coming period. Reclaiming the historical peak around 0.08 is only the first step.

I still have extremely strong conviction in Bitcoin’s long-term prospects. In my view, Bitcoin is not just digital gold; it plays the role and performs the function of a gold substitute asset far better than physical gold. Bitcoin still has room for multiple-fold upside in the future. But if we were to write down the grandest, most central story of the entire crypto world over the next five years, it certainly isn’t about digital gold—it’s about “the comprehensive tokenization supercycle of assets” and “the reconstruction of human wealth through AI-agent finance.”

And as Vlad said, most—or even almost all—of this wave of super-sized rolling tide will happen on Ethereum and settle there. That’s the underlying logic behind Ethereum’s inevitable great turnaround.

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

1. First, the (Clarity Act) is expected to be passed in September. Many people think the crypto world doesn’t need regulation. But to traditional financial institutions, this bill is a decisive “safety net” that determines life or death. Once there is a clear regulator and compliance rules written in black and white, Wall Street’s massive compliance budgets can legally and formally build trillion-dollar businesses on the crypto rails. Even if it doesn’t pass, the crypto industry has already proven it can wildly innovate without regulation; but that absolutely doesn’t prevent it from delivering an energy-nuclear-level super boost to the market after it is passed.

2. Second, a massive amount of short sellers and sidelined capital—suppressed off and on for a long time—are now flooding in crazily. A large amount of capital had previously been clinging to the “four-year crypto cycle law,” waiting for the so-called October lows. But now there are only the last five weeks until October. Those who were aggressively shorting, holding huge cash positions, and had previously left the market to speculate on AI concept stocks are suddenly waking up: at its core, crypto is the most central downstream settlement battlefield for the AI boom.

3. The strong return of international capital, represented by Asia. Asian markets such as South Korea were previously wildly chasing their local stock markets, but now they are redirecting their attention back to crypto assets at astonishing speed.

4. Performance competition among the world’s top financial institutions. This is a cold statistical fact: since June 30 this year, the most standout-performing asset globally has not been anything else—it has been crypto. Ethereum surged 54% over this period, while gold rose only 13%, and U.S. stocks had only single-digit gains. Imagine when the September 30 quarterly settlement arrives: if Ethereum remains at the top of the global major-asset returns leaderboard, then in the entire fourth quarter from September 30 to December 30, global fund managers will be forced into what kind of crazy FOMO-style buying and position chasing—just to avoid falling behind their peers.

With these four major catalysts, the ETH-to-BTC exchange rate will be very likely to break through the highest level of the year. Even if we make a very conservative, restrained financial valuation—and assume the exchange rate only repairs back to 0.04—so long as Bitcoin hits $150,000 as expected, the price of Ethereum will be directly locked in at $6,000. And considering that 0.08 is its historical peak ratio, that’s obviously an extremely conservative number.

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