Tom Lee Just Released 3 ETH Price Targets prediction

Added: 2026-05-17

[00:00:00]you'd want to own just a small piece of Ethereum >> [music] >> as a source of diversification and as a hedge.

[00:00:07]Now, Ethereum does track Bitcoin, so I think you should look at the price ratio and the current price ratio is below not only the 8-year average, but the 2021 high at 0.087.

[00:00:18][music] And you've seen this chart from us before.

[00:00:24]If Bitcoin gets to 250,000, which we think is fair value in the next 12 [music] months, and Ethereum gets to its the 8-year average of the price ratio, that's 12,000 Ethereum. That's a lot of upside from here.

[00:00:37]If it gets to the 2021 [music] high, that's 22,000 Ethereum.

[00:00:43]Keep in mind, those are two numbers to watch. And if ETH becomes the payment rails of the future, which we [music] believe is the case, that would imply $62,000 Ethereum. So, clearly a lot of upside from here.

[00:00:55]And Ethereum is [music] exiting a long consolidation, something I've talked about before. You can see this current consolidation's 5 years.

[00:01:01]But those other consolidations resulted in pretty explosive upside [music] moves. 227 times after the 2016 consolidation, and after the 2020 consolidation, a 54x for Ethereum.

[00:01:15]So, I think this next upside is going to be led by tokenization and [music] agentic AI.

[00:01:21]In a market driven by emotion, clarity is your only [music] real asset.

[00:01:26]Subscribe to keep your thesis sharp and stay ahead of the macro shift. 12,000, 22,000, 62,000.

[00:01:33]Those are Tom Lee's price targets for Ethereum, and he did it with the same theory again. And he just dropped all three of them in the same breath.

[00:01:41]If you're watching this [music] and your first reaction is disbelief, that's actually the right reaction. Because the question isn't whether those numbers are real, it's whether you understand the framework behind them well enough to decide if you believe it.

[00:01:55]So, let's get into it.

[00:01:56]Tom Lee runs Bit Investment Technologies and is the founder of Fundstrat. He's been one of the most accurate long-term callers in crypto.

[00:02:05]Not because he guesses right on every trade, but because he builds his targets from structure, >> [music] >> not sentiment. Price ratios, historical cycle behavior, on-chain data. You're not going to hear him say, "Feels bullish." You're going to hear him show you a chart and walk you through the math.

[00:02:23]And right now, the math is pointing straight up for Ethereum. Here's the first thing you need [music] to know.

[00:02:29]Lee is calling this a crypto spring, not a recovery, not a bounce, a structural change in cycle condition. His evidence is this. Ethereum has now closed up three consecutive months in a row, and according to his data, that has never happened during a crypto winter. Not once. Three months up in a row means the winter is over, full stop. Now, if you're thinking, "Okay, but that's just price action." You're right. So, let's talk about the framework he's building the big targets on.

[00:02:58]The core of Lee's thesis is a price ratio, Ethereum divided by Bitcoin.

[00:03:03]Right now, that ratio is sitting below its 8-year average and below the 2021 peak. In his model, if Bitcoin reaches $250,000, which he's calling fair value in the next 12 months, and Ethereum simply returns [music] to its historical average ratio, that gives you $12,000 Ethereum. Not a moonshot. The average, if ETH gets back to the 2021 high on the ratio, $22,000.

[00:03:30]And if Ethereum becomes the actual payment rails of the global financial system, $62,000.

[00:03:36]Those are the three scenarios. And in a few minutes, [music] you're going to hear Tom Lee explain all of it himself in detail. He gets into tokenization, AI agents, stablecoins, the future of banking. And he makes a case that the next leg of Ethereum's move is going to be unlike anything we've seen in this cycle.

[00:03:55]The main feature is up next. Don't skip a second of it.

[00:03:58]Ethereum is the future [music] of money.

[00:04:01]Here are some disclaimers.

[00:04:03]So, let's start with why I believe crypto spring [music] is here. I know that many of you believe that we're still in the fog of war, and it is indeed true the US [music] is in the midst of a conflict with Iran. But, what you have to focus on is that Ethereum has now [music] risen for 3 months consecutively.

[00:04:20]And in fact, if Ethereum closes May above 2100, that would be the third consecutive month.

[00:04:27]As I'm highlighting here, there's never been a crypto winter where Ethereum has closed up three consecutive months in a row. In other words, the fact that we're up 3 months in a row means crypto winter is over.

[00:04:40]Another way to think of this is to look at uh software stocks and Ethereum.

[00:04:45]Both have been highly correlated to each other.

[00:04:48]And as you can see, software stocks have risen along with Ethereum.

[00:04:53]In fact, at Fundstrat, software is now among our top sector picks as of May 1.

[00:05:00]So, that gets us to uh some facts that Ethereum [music] is the best performing asset since the start of the Iran war.

[00:05:06]It's performing as a wartime store of value.

[00:05:11]And here's the thing.

[00:05:12]It's been a great diversification [music] tool since 2016. Take a look at this first column that's highlighted. Let's look at different allocations you could have done in terms of owning Ethereum [music] on December 3rd December 31, 2016. From 0% all the way [music] to 33%.

[00:05:29]And these are the starting dollar value.

[00:05:31]So, if you had $100,000 for instance, [music] and you put 5% into Ethereum, that was $5,000 invested. This highlighted column is what it would be worth today. So, your $5,000 investment would have grown to 1.5 million.

[00:05:46]In other words, if you compare that to having zero allocated to Ethereum, okay?

[00:05:52]And you look at your total portfolio today, it's 230,000 if you had no exposure [music] to Ethereum versus 1.7 million if you had 5% allocated to Ethereum. In other words, you had a seven times total increase in your total portfolio with just a 5% exposure to Ethereum. Now, another way to think of this is how much of each asset would you need to own to protect yourself against a 50% decline in the S&P 500.

[00:06:21]Okay, so this is the required hedge.

[00:06:24]You would need just 0.4% 10 years ago in Ethereum to protect yourself against a basically a wipeout in the stock market.

[00:06:34]Gold, which is considered a store value, you'd have to add 37% of your portfolio.

[00:06:39]So, you can see the point here.

[00:06:41]You'd want to own just a small piece of Ethereum as a source of diversification and as a hedge.

[00:06:49]So, let's talk about the future of money.

[00:06:51]Now, Elon Musk said something pretty profound recently.

[00:06:54]He says that this future system won't use dollars as currency, just mass and energy. What he's really referring to is that compute and energy are the two scarce assets.

[00:07:06]In fact, Larry Fink at BlackRock believes that compute will actually become a new asset class and that we'll be buying futures of compute. Reid Hoffman, the billionaire founder of LinkedIn, said that crypto will become critical in an AI world.

[00:07:23]Okay.

[00:07:25]Well, let's think about stablecoin transactions, which we had said last year was the chat GPT moment for crypto, and you can see stablecoin volumes now exceed Visa payments. This is according to data from Bitwise.

[00:07:38]And Grayscale believes that the tokenized market is going to reach $300 as we tokenize real estate, fixed income, equities, derivatives, commercial real estate, basically everything.

[00:07:51]What does this mean for layer-one blockchains? Well, this is Ethereum, which is in pink, and the total value locked of tokenized assets. And you can see Ethereum moves pretty closely with that tokenization.

[00:08:07]Meaning that, according to Grayscale, networks that host a large share of tokenized activities may capture a meaningful portion of economic value. In other words, if Ethereum is the leading tokenization platform, its price will go up a lot.

[00:08:23]And Marc Andreessen, who's a very visionary about the future, says the grand unification of AI and crypto are age AI agents cuz they're going to need money.

[00:08:33]And we've talked about this before, that there's numerous reasons why blockchains are a better way for AI agents to use money.

[00:08:41]Okay. Well, let's bring this all together.

[00:08:44]If tokenization is the future of assets and money's becoming digital, and AI agents are going to use money, well, we should think about what it means for the most profitable banks in the future.

[00:08:58]Well, today JP Morgan is the most profitable bank in the world with 59 billion of net income projected this year, almost 60 billion, and 300,000 employees.

[00:09:08]But let's mix in two new types of companies, Jane Street, which just is a trading firm, and Tether.

[00:09:16]Jane Street's on track to make $40 this year with 3,000 employees, 1/1000 the number of employees at JP Morgan.

[00:09:25]In fact, Jane Street in the first quarter this year is reporting about 10 billion in net income.

[00:09:32]That means moving money, which is what Jane Street does, is starting to capture more value than the entire operations of a global bank. Again, going back to this chart, Jane Street makes more money than Bank of America, Wells Fargo, Citigroup, Morgan Stanley, and Goldman Sachs.

[00:09:50]Okay.

[00:09:51]And then let's look at Tether, which is the largest stablecoin operator in the world. It's going to earn about 15 billion this year with 300 employees.

[00:09:59]So, 1/1000 is the number of employees of JP Morgan.

[00:10:05]These are two new types of financial institutions. Didn't exist 20 years ago.

[00:10:11]But keep in mind that's sort of the story that technology as it gets introduced to sectors creates disruption and it reduces the value of incumbency. Now, I'm going to highlight a bunch here. Automobiles. We don't remember any of the horse buggy makers.

[00:10:26]We only think of the new entrants.

[00:10:28]With mobile, all these old names really largely don't exist. It's mostly mobile today.

[00:10:35]In digital media, nobody really remembers names like Hearst, Viacom, News Corp as the giants.

[00:10:42]They were the giants in their day. Today it's more Google, Meta, and TikTok.

[00:10:46]Even more recently, cloud computing.

[00:10:49]Before cloud computing, there were PC names, IBM, Compaq, Dell, Gateway.

[00:10:54]They've given away to Amazon, Microsoft Azure, Oracle, Google Cloud.

[00:10:59]And finally, in EVs.

[00:11:00]These traditional automakers are still around, but Tesla is far bigger. So, here's where we are.

[00:11:06]Tom Lee just walked you through one of the most structured Ethereum bull cases you're going to find anywhere right now.

[00:11:14]And the thing that separates this from the typical crypto content out there is that every number he gave you has a source. The price ratio has an 8-year average. The portfolio comparison goes back to 2016.

[00:11:28]The stablecoin volumes come from Bitwise. The tokenization projection comes from Grayscale.

[00:11:34]This isn't vibes, this is a framework.

[00:11:36]And the framework says three things.

[00:11:39]First, the cycle has turned. Three consecutive monthly closes up for Ethereum has never happened in a crypto winter. That's his definition of crypto spring and the data backs it.

[00:11:50]Second, the upside from here is not priced in. The ETH/BTC ratio is still below its 8-year average. That alone, if it simply reverts to mean while Bitcoin hits $250,000, gets you to $12,000 Ethereum.

[00:12:04]Third, the structural tailwinds are getting bigger, not smaller. Stablecoins just passed Visa in transaction volume.

[00:12:10]Grayscale is projecting a $300 trillion tokenized asset market. And AI agents are going to need a payment layer.

[00:12:18]Ethereum is the leading candidate for all three.

[00:12:21]Now, here's the cold take. Tom Lee has been early on crypto calls before. He was early on Bitcoin at $30,000. He was right, eventually.

[00:12:31]Being right on a 12-month timeline versus a 3-year timeline is a very different portfolio experience. So, the question you should be sitting with after watching this isn't is he right?

[00:12:42]It's what's my timeline and what allocation makes that risk worth taking?

[00:12:47]He answered that question too, by the way.

[00:12:49]His data says a 5% allocation to Ethereum in 2016 turned $100,000 into $1.7 million.

[00:12:58]You didn't need to bet the portfolio.

[00:12:59]You needed a position.

[00:13:01]Bitcoin's doing well, but so what?

[00:13:04]Right? Like it's it's still underperforming a lot of other markets this year.

[00:13:10]So, the problem is that the Nasdaq's, you know, shooting up to all-time highs, the stock market shooting up to all-time highs. Bitcoin has gone up, but it's still nowhere near all-time highs and that's not a declaration that you're about to have all-time highs. It's more so a declaration that Bitcoin is weak relative to the assets that are putting in all-time highs. And when those assets roll over and go back down potentially for that secondary window of weakness in the mid-term years that we normally get, that's how Bitcoin then goes back down to the lows and probably puts in a a lower low. So, and I don't know what the narrative is going to be. It could be energy stocks going back up. A lot of times energy does very well at the end of cycles and if the stock market's still putting in new all-time highs, then energy probably will as well. So, looking at things like XLE, I'd expect that's to bounce back up uh in the coming months. Um but, you know, going back going back just to the sort of the labor market stuff, if we want to look at like the number of states where the unemployment rate is rising compared to say 6 months ago, it is going up, but there's still windows or pockets of strength. So, if you look at a map of the states where the unemployment rate is rising over 6 months ago, yeah, like it is a lot of states, but it's also looked like that in other years as well, like 24 and 23, but notice how every year it's not the whole country affected.

[00:14:38]And if you look at recessions, like 2008, it's the whole country.

[00:14:45]2001, it's the whole country.

[00:14:48]So, there's still pockets of of optimism. And the market likes to climb the wall of worry. So, the stock market right now is is still following the S&P M2 fractal, by the way, as as crazy as that sounds. And actually in February, that was one of the reasons I you know, I I mentioned this in the first place was that, all right, well, what if this thing continues like this? Could it you know, could it continue in this fashion and and still mimic what we saw back then?

[00:15:21]And look, I think this is the I think it's going to break. Honestly, I do think it's going to break. I don't think this whole thing's going to play out. But, it hasn't really broken yet is the point, right? Like it hasn't really broken yet.

[00:15:33]And and this might be sort of the fear that we have to live with later this year is what happens if it doesn't break. Like what happens if the stock market does find a top within the next few weeks, drops back down, and then rallies up in a September cuz that's where a September would be that top right there. And September is exactly where the S&P topped in 2018. You know, that's where it topped was in September, I I believe.

[00:15:56]Um let me double check that, but feel like that 2018. Yeah, it was it was right here in September when the S&P 500 found found that high. Um uh around that period. I guess I can zoom in, but you guys I think kind of get the uh the idea.

[00:16:14]You can see it was the week of September 17th. The S&P hit a high of 2940.

[00:16:19]And that ended up marking the high for the year.

[00:16:23]So, who's to say that it's not following the S&P divided by M2 from from back then? It very well could be, but for now, I think you you know, you look at the labor market and you say, "Look, until you see lower asset prices, you're unlikely to roll over into into a recession. And um and while there is weakness in parts of the labor market, it is not yet widespread enough for it to sort of trigger those recessionary warnings. And if we look at the recession risk dashboard, it still remains relatively low, right? And it's been relatively low for you know, for I think since the last recession in 2020.

[00:17:02]Like we haven't even really had any like major fake moves. This risk metric hasn't even gone above 0.16 since 2020.

[00:17:11]So, we'll keep an eye on this. I mean, it's it's made up of the employment area, national income and product, production and business, and also you can turn on interest rates on here as well if you want. It's not as clean, but it does provide a little bit more signal. One of the reasons why interest rate risk is good is cuz it tends to be a little bit more forward-looking. The other ones almost require a stock market drop to you know, to trigger, but the interest rate one often triggers a little bit earlier. But when you use it, it makes it a little less clean. Um so, you know, going back over to the to the labor market, I'm I'm not sure if there was any other major things that happened. I guess we can look at total nonfarm. That's probably something to look at. So, if you look at uh well, it's the unemployment level, but if we look at um the employment statistics, employment level.

[00:17:58]Total nonfarm increased by a little over 100,000. So, it is still going up.

[00:18:03]Year-over-year change is almost negative, but not quite, right? Like year-over-year change is still about a quarter million jobs. Um it's really close to being negative, but it it's not there yet, and who knows when it will be negative. Uh total temporary help service employees, that looks like it's it's starting to go up a little bit here, right? Like you can see it's actually been moving up since last year.

[00:18:29]So, it's moving in the right direction.

[00:18:31]Um but it was moving in the right direction in '01, and then it and then we still had a drop in the stock market, so it doesn't necessarily mean anything.

[00:18:41]But we'll see how that develops. Um we also have nonfarm private payroll.

[00:18:46]This is from the uh the automatic data processing research institute, the ADP.

[00:18:50]If you look at the year-over-year change there, it's it's been moving up a little bit recently, so that's a little that's that's good to see in the in the labor market. So, as of right now, the data in the labor market is still holding up.

[00:19:03]Layoffs remain low. The unemployment rate remains relatively low.

[00:19:07]Historically, as you go into the summer, that's when initial claims start to pick up. So, my guess would be that you'll see initial claims start to pick up and that might be reflected in the unemployment rate as we get later on in the summer. Um and I do think you'll have sort of like a another correction in the stock market later this year that will likely culminate in sort of the late Q3, early Q4 period, maybe even later Q4, where that's what kind of corresponds to that Bitcoin drop into the back half of the year, which is how it typically uh plays out.

[00:19:42]But, hopefully this has been useful to you guys and then that basically wraps up, I think, our discussion here of the labor market.