Why Tom Lee Believes Ethereum Is Replaying Bitcoin's 2017 Bull Run—And What Bitmine's Aggressive Accumulation Reveals

The Wall Street crypto advocate has a bold take: Ethereum is experiencing what Bitcoin did seven years ago, and institutional money is finally waking up to it. Tom Lee’s newly launched Bitmine proves he’s putting real capital behind this conviction.

The Speed Play: Why Bitmine Accumulated 833,000 ETH in Record Time

Within just four weeks of its July launch, Bitmine assembled nearly 1% of Ethereum’s total supply—approximately 833,000 ETH—making it the world’s largest publicly listed Ethereum treasury company. The pace is staggering: Bitmine is acquiring Ethereum 12 times faster than MicroStrategy accumulated Bitcoin.

The strategy mirrors MicroStrategy’s playbook. In August 2020, MicroStrategy’s stock was worth $13; Bitcoin climbed from $11,000 to $120,000, delivering a 30x return when combined with strategic holdings. Lee believes Ethereum presents a similarly massive macro opportunity for the next decade, hence the urgency to accumulate before prices surge.

The target is ambitious: Bitmine aims to eventually hold 5% of Ethereum’s total supply—roughly $20 billion worth. If acquisition speeds hold steady at $0.80 to $1.00 daily, the company projects reaching that 5% milestone within 1-2 years. This contrasts sharply with MicroStrategy, which took five years to amass 3.2% of Bitcoin’s circulating supply, purchasing just $0.16 worth daily.

Liquidity Fuels Velocity

Bitmine’s acceleration isn’t random—it’s anchored in raw market liquidity. The company boasts trading volumes of $1.6 billion daily, ranking 42nd among U.S. stock market equities and comparable to Uber’s trading profile. By comparison, Ether Machine (the third-largest Ethereum holder) sees only $7 million in daily volume, and BTBT (fourth-largest) manages just $49 million.

This liquidity differential matters enormously. High-speed accumulation requires firepower; without deep order books and tight spreads, buying large positions would move markets against you. Bitmine’s institutional backing—led by macro hedge fund Mosaics, with support from Founders Fund, Stan Druckenmiller, ARK Invest, and Bill Miller—provides both capital and credibility to attract trading interest.

The Staking Edge: Why Ethereum Asset Companies Beat ETFs

Unlike a simple ETF, Bitmine operates as an infrastructure entity. The $3 billion in Ethereum holdings generate over 3% annual yields through native staking, which qualifies as net income under GAAP accounting standards. At a conservative 20x price-to-earnings multiple, this staking income alone values the holdings at 6x net asset value—before even considering speed premiums or liquidity bonuses.

Lee frames the valuation this way: Base holdings represent 1x NAV, staking income adds 6x earnings premium, execution speed contributes another multiplier, and extreme liquidity deserves its own multiple. The combination suggests Bitmine should trade at a significant premium to spot Ethereum prices, not at parity.

Institutional investors face a choice: buy Ethereum directly, settle for an ETF’s limited features, or gain exposure through a treasury company that actively accumulates more Ethereum while generating staking income. For U.S. stock market participants, the latter offers unique optionality.

Wall Street’s 2017 Moment: Why Now?

Lee’s core thesis rests on historical pattern recognition. In 2017, Bitcoin moved from $1,000 (dismissed as “for drug dealers and dark web users”) to $120,000—a 120x rally. At the time, institutional holdings were nearly zero; the move was entirely retail-driven. Fundstrat’s research revealed 97% of Bitcoin’s price appreciation came from network growth, not speculation—more wallets, more activity, more utility.

Ethereum now occupies that same position. Wall Street dismissed it as a “dead chain,” preferring faster competitors or alternative verification methods. Yet Ethereum has operated for a decade without meaningful downtime. More recently, Circle’s strong IPO, Coinbase’s recovery, and Robinhood’s rally signal that institutions are reconsidering their crypto infrastructure bets.

The tokenization wave underway—from real-world asset representation to artificial intelligence infrastructure—increasingly centers on Ethereum. Layer 2 solutions, DeFi protocols, and stablecoin issuance all depend on Ethereum’s base layer security. Goldman Sachs and JPMorgan don’t want Ethereum scattered across millions of wallets; they want compliance-driven entities and professional-grade custody. Bitmine fills that role.

Price Catalysts: From $4K to $15K and Beyond

Lee’s near-term target places Ethereum at $4,000 by year-end. Looking further ahead, $6,000 to $15,000 seems reasonable as other treasury companies enter the market and Bitcoin continues appreciating. By 2026, Federal Reserve easing and expanding liquidity could push prices substantially higher.

The Ethereum-to-Bitcoin ratio strengthens the case. A year ago, ETH/BTC stood at 0.05; today it’s more favorable, suggesting Ethereum is outpacing Bitcoin’s narrative recovery. Current pricing at $2.93K remains accessible for institutional deployment.

No Bubble Yet—Skepticism Still Dominates

Lee dismisses bubble concerns, pointing out that true market peaks occur when everyone is bullish. Today, bearishness reigns: traders remain skeptical of Ethereum, Bitcoin, and equities broadly. Leverage-fueled crashes happen when companies use complex debt structures; Bitmine explicitly maintains a clean balance sheet with no financial engineering.

The real risk would emerge only if excessive leverage spread across the ecosystem. Standalone treasury companies with strong backing pose minimal systemic danger. If Ethereum declines and Bitcoin falls, Bitmine shares fall too—but that’s price discovery, not contagion.

The Contrarian Bet Doubles Down

History suggests non-consensus views drive markets higher. When everyone dismissed Bitcoin in 2017, recommending it felt career-threatening for institutional advisors. Fundstrat lost clients over it. Yet Bitcoin delivered 100x returns to those who looked past the noise.

Ethereum’s current moment echoes that setup. Layer 2 benefits are finally reaching Layer 1 utility. Smart contract blockchains rival Bitcoin in relevance. Staking infrastructure attracts Wall Street capital. The price hasn’t followed yet—a lag that creates opportunity for those accumulating now.

Bitmine’s aggressive 12x-faster acquisition pace isn’t irrational exuberance; it’s an asymmetric bet that the next institutional wave will dwarf retail’s early enthusiasm, just as Bitcoin proved.