Tom Lee Predicts Ethereum Price Could Exceed 10000 Dollars

Tom Lee of Fundstrat has shared a bullish forecast for Ethereum (ETH), suggesting its price could surge into the five-figure range. The key driver behind this optimism is the explosive growth of stablecoins, which are increasingly bringing real-world utility and demand to the leading smart contract platform.

Short-Term and Long-Term Price Targets

In a recent interview, Lee highlighted the analysis from his team at Fundstrat. In the immediate future, their technical strategists see significant potential for growth.

"Mark Newton, who is head of technical strategy at Fundstrat, has some views on Bitcoin and Ethereum. In the near term, he thinks both have 20% upside from here, so that would be putting Ethereum closer to $3,300. And he thinks something around $4,500 or $5,000 in the next few months is achievable."

However, Lee's long-term view is even more ambitious. He proposes a valuation model that could see ETH trading above $10,000. This is based on a comparison to Circle, the issuer of the second-largest stablecoin, which heavily relies on the Ethereum network.

A Valuation Mismatch

Lee points out that Circle is valued at approximately 100 times its EBITDA (earnings before interest, taxation, depreciation, and amortization). He argues that if the same valuation metric were applied to the underlying technology that powers it, Ethereum's value would be substantially higher.

"That’s a pretty big move for Ethereum, but I think the perspective that someone could have is to realize that Circle trades at around 100 times EBITDA... But if you applied that metric to the layer-1 Ethereum, it would imply a value per ETH token north of $10,000. So I think it shows you that if the stablecoin is being valued in the market at a hundred times, that the underlying layer-1, which is really what’s securing those transactions, probably is undervalued."

The 'ChatGPT Moment' for Stablecoins

Lee believes Ethereum is currently benefiting from what he calls the “ChatGPT moment” of stablecoins. This analogy refers to the rapid, mainstream adoption of dollar-pegged crypto assets by consumers, businesses, and even banks, signaling a shift towards practical application.

"Stablecoins have really exploded because consumers, businesses and banks are really interested in adopting this. The majority of stablecoins are actually transacted on the Ethereum blockchain. And if Treasury Secretary [Scott] Bessent is right, and it goes from a $250 billion market to $2 trillion, that’s exponential demand for Ethereum."

This potential tenfold increase in the stablecoin market represents a massive wave of demand for the Ethereum network, which serves as the foundational settlement layer for these transactions. As of the time of writing, Ethereum's price stood at $3,024, highlighting the significant upside potential in Lee's forecast.

You can view the full discussion in the original interview.