Ethereum could top $10,000 within 12 months on institutional demand and tokenization

Ethereum could trade well above $10,000 within the next 12 months as institutional allocations, tokenization demand and buying by digital asset treasury companies absorb market supply, BitMine Chairman Tom Lee said.

In an October 19 CoinDesk interview, Lee said the market could be entering one of its larger crypto cycles. While uncertain whether Ether would reach the level by year-end, he said its price could be “much higher than $10,000” within 12 months.

BitMine surpassed 6 million ETH in holdings after 15 months, with most of the accumulation taking place during a bear market. Lee described the milestone as substantial given the broader crypto downturn.

He expects digital asset treasury companies, including BitMine, to sharply increase crypto purchases over the next 12 to 18 months. By acquiring tokens and removing supply from the market, such companies could support the relative performance of their underlying assets, he said.

Ethereum treasury companies currently hold about 7% of total ETH supply, more than their Bitcoin or Solana counterparts. Lee said that share could rise to 15% during the current bull cycle.

Treasury companies trading below net asset value offer exposure to their underlying crypto assets at a discount, Lee said. When they trade above net asset value, they can raise capital to buy additional crypto, further reducing available supply.

Institutional demand provides another potential catalyst. Financial institutions recommend crypto allocations ranging from 2% to 10%, but most institutional investors still have no exposure, Lee said. With Ethereum up 65% in the third quarter while the S&P was roughly flat, he expects a major rotation in the fourth quarter.

Lee identified tokenization as the next growth area for financial institutions, offering banks a way to improve efficiency across their organizations and transform the assets they hold. He said private chains had failed to generate sufficient liquidity and success, while projects built on public networks such as Ethereum had performed better.

Ethereum’s competitive strengths include its developer ecosystem and diversified security structure, Lee said. He estimated its developer base is nearly 20 times the size of the next-largest layer-1 network. Ethereum, Solana, Avalanche and Canton are ultimately pursuing the same goal of building a new financial system and are competing more with traditional finance than with one another, he added.