Tom Lee, the president of Bitmine, defended the idea of a Wall Street-driven ETH supercycle this weekend. If, in his view, the recent decline does not call the uptrend into question, what are we to make of this?
Bitmine’s president expresses optimism for ETH
Among Ethereum Treasury Companies, BitMine is the largest, with over 3.5 million ETH in reserves. Its president, Thomas “Tom” Lee—who regularly stands out for his optimistic predictions—reiterated his stance on Saturday, arguing that the current weakness in cryptocurrency prices is temporary:
To me, the weakness in the cryptocurrency market shows all the signs of one or two market makers having 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, which is based on the blockchain? No.
In conclusion to his tweet, he nevertheless urged caution regarding leverage to guard against the risk of liquidation.
Nevertheless, one should be particularly wary of the concept of a “supercycle.” Our long-time readers may recall that this term was already being used in 2022 by the executives of the now-defunct investment fund Three Arrows Capital to avoid facing the reality of the bear market.
While cycles may always differ—and while nothing prevents cryptocurrencies from resuming an upward trend—it is nevertheless clear that there are current similarities with previous cycles.
As for Ethereum specifically, if there is a Wall Street “supercycle,” it appears to be driven primarily by technological adoption rather than prices. Regardless of traditional finance, the Ethereum ecosystem has evolved significantly since the last bear market, whether through the transition to Proof-of-Stake (PoS), the implementation of sharding, or a multitude of other improvements designed to optimize its operation and enhance the user experience.
However, when it comes to the price of ETH, it’s struggling to impress. Granted, between the low of the previous bear market at $880 and the most recent all-time high (ATH) of over $4,950, Ether rose by 463%; but since then, its price has corrected by more than 35%.
Furthermore, the latest ATH surpassed the 2021 high by less than 9%, despite all the technical advancements made since then:
ETH price (monthly data)
Returning to the hypothetical market manipulators in trouble mentioned by Tom Lee, if this is true, the truth may come to light in the coming weeks. In the meantime, ETH is trading at $3,180, down 0.75% over the past 24 hours.
