Tom Lee: ETH Should Exceed $5,000, Easily Surpassing $10,000 in 1-2 Years

Compiled by: Deep Tide TechFlow

Guest: Tom Lee (Chairman of BitMine Immersion Technologies, Co-founder and Head of Research at Fundstrat Global Advisors, CIO of Fundstrat Capital)

Host: David Hoffman (Bankless)

Podcast Source: Bankless

Original Video Title: BitMine Is About to Own 5% of ETH | Tom Lee

Broadcast Date: August 24, 2026

Disclosure: Tom Lee is the chairman of BitMine Immersion Technologies (NYSE: BMNR), the largest institutional holder of Ethereum globally, holding approximately 5.8476 million ETH as of August 23, accounting for about 4.8% of the company's total supply. Lee is also a personal investor in BitMine, and his managed Fundstrat Capital operates the GRNY ETF, with Fundstrat's core business model based on paid research subscriptions. Lee's personal wealth is highly correlated with the price of ETH, the stock price of BMNR, and the performance of GRNY. All views expressed in this episode regarding Ethereum and the crypto market align with his significant financial interests. Readers are advised to consider these conflicts of interest in their judgments.

Key Points Summary

• BitMine has increased its ETH holdings from 0 to approximately 5.82 million in 14 months, representing nearly 4.9% of the total supply, just about 3% away from the 5% target.
• All funding was achieved through equity financing, with no debt or convertible bonds; Lee refers to this as "keeping the capital structure clean."
• They have been buying ETH continuously for over 60 weeks, and in the last 5 weeks, they shifted to a "ETH purchase + stock buyback" strategy, dynamically adjusting based on capital return rates.
• After reaching 5%, they are unlikely to stop, provided institutions begin treating ETH as a long-term asset; the real evaluation will come in 2027.
• BitMine does not rely on selling ETH to cover expenses, with annual staking yields of about $300 million, sufficient to cover the $30-35 million annual dividends of 9.5% preferred shares (BMNP).
• Lee compares ETH to "stocks/land," emphasizing its core attribute as a store of value rather than a cash flow asset like bonds.
• He sets a price target: in the next bull market cycle, ETH should exceed $5,000; with the addition of Wall Street tokenization and AI demand, it could easily surpass $10,000 within 1 to 2 years.

Highlights of Insights

• "ETH is a self-yielding asset. BitMine has no need to sell any ETH due to financial pressure." Tom Lee on whether BitMine will sell ETH.
• "If you treat the stock market as a cash flow machine, the S&P 500 has risen about 10 times over the past 15 years, with dividends contributing only 30%, and the remaining 9.7 times unrelated to cash flow. The stock market is essentially a store of value." Tom Lee on whether ETH is a store of value or a cash flow asset.
• Lee compares BMNP to a three-year ETH parity call option: the company pays a 9.5% dividend annually in exchange for the right to lock in more ETH at current prices; if one were to buy a comparable call option in the market, the option fee could be close to 100%. Tom Lee explains why they issued 9.5% perpetual preferred shares.
• "As AI develops, crypto becomes more important. Crypto is the downstream story of AI." Tom Lee on the relationship between AI and crypto.

Content

1. From 0 to Nearly 5% in 14 Months: What Did BitMine Do Right?

On June 30, 2025, BitMine announced its transformation into an Ethereum treasury company, aiming to acquire 5% of the ETH supply. At that time, the two hosts of Bankless privately thought, "5% is impossible to buy." Fourteen months later, BitMine's holdings have reached approximately 5.82 million ETH, close to 4.9% based on a total supply of 120.7 million. Host David Hoffman remarked at the start of the show that this is one of the few cases in the digital asset treasury (DAT) space that "not only avoided the graveyard but also exceeded expectations."

Tom Lee attributes the success to three points.

First, the communication has always been simple and consistent. He told investors that the capital structure must remain clean: all financing was done through equity, with no debt or convertible bonds. Second, positioning the purchase of ETH as "helping the Ethereum ecosystem," the 5% target must be significant but not overly concentrated. Third, respecting investors' intelligence by not pushing the stock price up weekly with stories, but emphasizing a multi-year time frame. Lee quoted Michael Saylor: companies like this should be evaluated over a four-year horizon, not weekly fluctuations.

More importantly, BitMine has completed most of its financing above the net asset value (NAV), with the per-share ETH holding increasing over 10 times from the initial trading level of about $450. This means early shareholders have significantly amplified their ETH exposure per share, which is a core reason why the stock price has remained above $450.

2. Over 60 Weeks of Continuous Buying: Where Does the Money Come From?

More astonishing than the scale of holdings is the buying discipline. Since its transformation, BitMine has been buying ETH weekly for over 60 weeks. In the same period, Strategy (MSTR) has repeatedly paused Bitcoin purchases and even sold some. Lee explains that their ability to continue buying hinges on "doing the capital return rate's highest priority every week."

In the last 5 weeks, BitMine's cash usage has shifted to a "ETH purchase + stock buyback" combination. Lee states that when ETH may experience a significant market movement before the year's end, the company will become more tactical: continuing to accumulate ETH while also buying back stock to concentrate the ETH content per share.

The sources of funds mainly come from three areas.

• Issuing common stock above net asset value (NAV): This is the primary source of cash, but used judiciously.
• Buying ETH at a discount: Lee revealed that most ETH acquired over the past 14 months was not purchased at spot prices but rather obtained through structured arrangements at a discount, adding value for shareholders.
• Perpetual preferred shares BMNP: Issued in June, with a 9.5% dividend, oversubscribed more than five times, issued at $80, and trading around $91 at the time of the broadcast. Lee likens it to "buying a three-year ETH parity call option at a 9.5% annual interest," while the market price for comparable options could be close to 100%.

Staking yields are also compounding. BitMine currently has staked over 5 million ETH through the Maven self-staking platform and partners. With an annual staking yield of about 2.6% to 2.7%, approximately 120,000 new ETH are added each year. Lee calculated that they are about 200,000 ETH away from the 5% target, but can "automatically produce" about 120,000 ETH annually through staking, so only about 80,000 more need to be purchased to meet the target.

3. What Happens After 5%: Three Possibilities, But Selling ETH Is Not a Priority

The most pressing question in the market: once BitMine acquires 5%, will this largest ETH purchasing machine stop?

Lee provided two directions. First, 5% is not necessarily a hard cap. If companies begin treating ETH as a long-term asset, it would be "perfectly reasonable" for BitMine to continue buying above 5%, but this question will need to be reassessed in 2027. Second, even if they only stop at 5%, staking rewards will still allow holdings to grow naturally; at that point, BitMine may choose to sell rewards to control the total proportion, but will not sell coins due to financial pressure.

He reiterated that BitMine has no need to sell ETH. With annual staking yields of about $300 million, and the annual dividend burden of 9.5% preferred shares being around $30-35 million, the coverage multiple is very high. The company does not even convert these staking rewards into USD or stablecoins. Rather than selling coins, Lee prefers to "find ways to monetize ETH assets," such as deploying the approximately 800,000 ETH currently unstaked into scenarios beneficial to the ecosystem.

This also leads to BitMine's second transformation: from a pure ETH purchasing treasury company to an Ethereum ecosystem company. The Maven staking platform not only manages BitMine's own ETH but has also secured over $2 billion in external client assets. Lee describes it as a "real cash flow business" incubated internally by BitMine.

4. Funding EF Spin-off Entities: The Ecological Role BitMine Wants to Play

The Ethereum Foundation (EF) has been contracting its operations over the past year, delegating some work to three new entities: the non-profit EthLabs, the for-profit EthSystems, and EthInstitutional. BitMine is a major funder of these seed rounds.

Lee explains that Ethereum has grown too large to be managed by a single organization, just as the semiconductor industry does not rely solely on one industry association. BitMine, as permanent capital (with no maturing debt or redemption pressure), can provide a runway of three years or longer, allowing these spin-off entities to focus on execution without worrying about financing month to month. This is both a public good investment and a business consideration: BitMine hopes Ethereum can capture as many future opportunities from tokenization and AI as possible.

5. What Exactly Is ETH as an Asset?

David Hoffman asked Lee during the show: Is ETH a cash flow asset or a store of value? Lee chose the latter but framed it differently.

He believes that simply categorizing the "stock market" as a cash flow asset is incorrect. Taking the S&P 500 from 2009 to now as an example, total returns have increased about 10 times, with dividends contributing only 30%, and the remaining 9.7 times coming from capital appreciation. Investors buy stocks essentially believing that companies can allocate capital better than they can; truly pure cash flow assets are bonds. ETH is more like stocks and land: land can generate cash flow through rental, but long-term appreciation is its core attribute across cycles.

He also responded to the skepticism that "institutions will use Ethereum for tokenization but do not need to hold large amounts of ETH." Lee believes this viewpoint is a common narrative in bear markets, and once ETH prices enter a new bull run, this narrative will quickly fade. He drew a parallel with the US dollar: the dollar itself cannot be exchanged for gold from the government, yet it remains the global unit of trade. Attempting to explain asset prices using a single economic model often leads to absurd conclusions.

6. Lessons from Saylor and the "Call Option" Logic of BMNP

BitMine is often compared to Michael Saylor's Strategy. Lee's observation is that Strategy has been quite successful as a common stock story, but Saylor's later strategy became complex, incorporating digital credit, volatility monetization, and other leveraged structures. Lee believes these innovations require a longer time dimension for evaluation, stating, "It may only become clear from now until 2032."

BitMine has chosen a different path of capitalization: locking in dollar costs with 9.5% perpetual preferred shares while retaining the upside potential of common stock. Lee calculated that if ETH rises to $5,000 or $10,000, staking yields will far exceed preferred share dividends, providing common shareholders with significant leverage. He also hinted that if BitMine decides to buy far more than 5% of ETH, it may expand the BMNP scale; otherwise, the current issuance of preferred shares is already sufficient.

7. Cycles, AI, and ETH Price Targets

Lee believes the crypto market has bottomed out. He stated that from a time perspective, it is about 95% complete, and from a price perspective, about 90% complete. "Unless you are a genius, buying here is likely cheaper than waiting for confirmation of the bottom."

He also agrees with David's assertion that "AI is siphoning off all funds from crypto," but adds a key judgment: crypto is the downstream story of AI. As AI matures, the demand for machine-to-machine trading, on-chain settlement, and tokenized assets will increase, which will enhance the importance of crypto. This year's AI trend has made it difficult for other assets to gain attention, but this dynamic is changing.

As for price targets, Lee directly provides numbers:

• Just because we are entering a new bull market cycle, ETH should exceed $5,000.
• If we add Wall Street tokenization and AI-driven demand, ETH could easily exceed $10,000 within 1 to 2 years.

He also made a rough calculation of shareholder returns: if ETH flips Bitcoin, the corresponding ETH price would be about $15,000, and BitMine's stock price could potentially increase tenfold from current levels, reaching about $180.

8. Conclusion

BitMine has proven in 14 months that the Ethereum treasury strategy can be scaled without debt. For ordinary investors, the value of this episode lies not in "how BitMine does it," but in the framework Lee provides for evaluating ETH: Is it a store of value? Can staking yields cover capital costs? Will institutional demand for holding coins truly emerge in 2027?

It is also important to remember that Lee is one of the most obvious stakeholders in this game. His company holds nearly 5% of ETH, and he is deeply tied to its success or failure. The path he envisions for a $10,000 ETH sounds enticing, but whether that path can be realized still depends on macro cycles, regulatory progress, and whether Ethereum can truly translate the narratives of tokenization and AI into on-chain demand.