Tom Lee: Ethereum is Starting a Super Cycle Like Bitcoin

Recent fluctuations in the crypto market may stem from a significant gap related to market makers. Tom Lee emphasizes that this situation is an important factor in the process of pulling back crypto assets, highlighting key points for investors to pay attention to in the fall period.

As the President of BitMine Immersion Technologies and the research director at Fundstrat, Lee stated that the sharp fluctuations faced by crypto markets are influenced by some large investors trying to trigger liquidations in the markets. While this process may cause some short-term pains, he stressed that investors should not miss the bigger picture.

Lee argued that a strong structure for Ethereum is forming on the Wall Street side, suggesting that this creates a long-term super cycle for Ethereum. He reminded that Bitcoin has historically experienced pullbacks over 50% six times and over 75% three times, expressing that volatility is inherent to this market. He noted that obtaining significant gains often depends on those who remain patient.

However, Lee's long-term optimistic outlook on Ethereum has faced some criticisms within the crypto community. Some Bitcoin advocates have claimed that Ethereum lacks unique utility and that there are hundreds of blockchains with similar features. Nevertheless, while Lee refrained from setting price targets, he emphasized that the path for Ethereum will not be linear. It is clear that strong use cases and institutional adoption will be the real test of this thesis.

In the upcoming period, the sustainable growth of on-chain activity in Ethereum and layer 2 networks is considered a critical indicator for the market. Lee believes that the current market stress is temporary and anticipates that recovery will begin within 6 to 8 weeks following Thanksgiving. He particularly advises investors against using leverage during this period.