Tom Lee, president of Bitmine, defended the idea of an ETH supercycle driven by Wall Street this weekend. If, for him, the recent decline does not call into question the upward trend, what should we make of this?
Bitmine president expresses optimism for ETH
BitMine is the largest Ethereum Treasury Company, with more than 3.5 million ETH in reserves. Its president, Thomas “Tom” Lee, who regularly stands out for his optimistic predictions, reiterated this on Saturday, arguing that the weakness in cryptocurrency prices is temporary:
To me, the weakness in the cryptocurrency market has all the signs of one or two market makers with a significant “hole” in their balance sheets [and] sharks circling to trigger a liquidation/price collapse. Is this pain short-lived? Yes. Does it change Wall Street’s ETH supercycle based on blockchain? No.
In conclusion to his tweet, he nevertheless urged caution regarding leverage in order to guard against the risk of liquidation.
Nevertheless, we should be particularly wary of the notion of a “supercycle.” Our long-time readers may remember that this term was already being used in 2022 by the leaders of the now-defunct Three Arrows Capital investment fund to avoid facing the reality of the bear market.
While cycles can always be different and there is nothing to prevent cryptocurrencies from returning to an upward trend, it is nevertheless clear that there are similarities with previous cycles.
As far as Ethereum itself is concerned, if there is a Wall Street supercycle, it seems to be driven more by technological adoption than by prices. Regardless of traditional finance, the Ethereum ecosystem has evolved significantly since the last bear market, whether in the transition to Proof-of-Stake (PoS), the implementation of sharding, or a multitude of implementations to optimize its operation and improve the user experience.
However, when it comes to the price of ETH, it is struggling to convince. Admittedly, between the low of the previous bear market at $880 and the latest all-time high (ATH) at over $4,950, Ether has risen by 463%; but since then, its price has corrected by more than 35%.
What’s more, the latest ATH beat that of 2021 by less than 9%, despite all the technical advances made since then:
Returning to the hypothetical market makers in difficulty mentioned by Tom Lee, if this is true, the situation could become clearer in the coming weeks. In the meantime, ETH is trading at $3,180, down 0.75% over the last 24 hours.
