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

Market Overview - Ethereum's price is down 40% from its August all-time high of $4,950, currently hovering just below $3,000, despite a strong year and predictions of $7,500 by year-end from institutions like Standard Chartered [1][2] - Market activity typically slows during the holiday season, contributing to a decline in crypto prices due to year-end tax-loss selling, particularly from December 26 to December 30 [1] Institutional Interest - Ethereum has celebrated its 10th anniversary and successfully implemented two major technical upgrades this year, attracting institutional interest [2] - Corporate treasuries and exchange-traded funds currently hold $20 billion worth of Ethereum [3] Bitmine's Strategy - Bitmine, led by Tom Lee, remains bullish on Ethereum, describing the current market as a "supercycle" and has purchased an additional $131 million in Ethereum, adding to a $1.4 billion buying spree in December [4] - Backed by prominent investors like Peter Thiel's Founders Fund and Cathie Wood's ARK Invest, Bitmine owns 3.4% of Ethereum's circulating supply, aiming for 5%, with a current value of over $12 billion [5] Financial Projections - Bitmine plans to stake its Ethereum tokens, projecting an annual income of $374 million, or over $1 million per day, from staking activities [5] - Despite the bullish outlook, Bitmine's stock has fallen over 50% since September, indicating market pressures on firms transitioning to cryptocurrency holdings [6] Market Sentiment - Some industry experts express skepticism about the investment strategy of buying cryptocurrencies with the hope of maintaining value above certain levels, labeling it as unwise [7]