In a recent conversation with Wellsion’s Chris Perkins, Bitmine Chairman Tom Lee said that Ethereum could face further downside before rebounding early next year.
Fundstrat’s founders expect the token to approach $2,500 in the short term. He expects it to jump to $7,000 to $9,000 in January as new money flows into the market.
Related: Tom Lee warns of structural pressures, market maker stocks blamed for crypto decline
Notably, Ethereum is trading at $2,940, up just 0.8% in the past day after falling 30.5% over the past month. Ethereum is currently 40% below its August all-time high of $4,953.
“Yes, there is a downside, perhaps up to $2,500, but it is negligible compared to the upside from discounting the supercycle. We think ETH could reach $7,000 to $9,000 by the end of January,” Tom Lee said.
Market pressures continue after October 10 turmoil
Lee said Ethereum’s decline from about $4,800 to below $3,000 reflects continued stress stemming from the October 10 cryptocurrency collapse, where pricing issues and thin liquidity triggered widespread auto-deleveraging. He said market makers and leveraged traders were caught off guard, creating sustained selling pressure.
He cited analysis by technical strategist Tom DeMark, who views current price movements as part of a systematic liquidation cycle. DeMark has set a downside price target around $2,500, which he believes is a potential “bottom area” where forced sellers typically exit.
Lee added that after the October events, cryptocurrencies were separated from equities. While stock prices continued to rise until late October, digital assets continued to fall, suggesting that the problem is structural rather than tied to new economic risks.
Tokenization momentum forms core of bullish case
Lee said Ethereum’s long-term prospects are supported by growing demand for tokenized assets. He compared today’s transition to the U.S. exit from the gold standard in 1971, which prompted Wall Street to create new financial products such as futures, ETFs and money market funds.
He said stablecoins now serve the same role by putting dollars on blockchain rails. He noted that the growth of stablecoin issuers, including Tether, which he said was worth hundreds of billions of dollars in recent funding discussions, is indicative of the scale of the transition underway.
According to Lee, the digital dollar is just the beginning. He expects stocks and other assets to move on-chain, allowing for continuous trading and quick settlement.
Growth of ETH-based financial infrastructure
Bitmine, the digital asset company chaired by Lee, holds about 3% of Ethereum’s circulating supply and aims to increase this to 5%. He said the company’s strategy includes building infrastructure, supporting staking networks, and facilitating communication between developers and traditional financial institutions.
Bitmine has begun building a validator network by partnering with several staking providers to create an extensive US-based compliant staking infrastructure. Lee expects staking yields to provide stable income as the network grows.
Related: Tom Lee Reveals Ethereum Buy Zones, Generating Strong Market Signals
He also discussed Bitmine’s investment in a Treasury entity related to WorldCoin, a project that uses iris scanning technology to verify human identity. He said the system uses cryptographic hashes rather than storing biometric data, a feature he believes is important as digital interactions increase.
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