Tom Lee: Ethereum has the potential to reach 30,000 USD, would you dare to invest?

Yesterday, Tom Lee, the founder and head of research at Fundstrat Global Advisors, made a noteworthy forecast in the crypto world. In a series of six articles, Lee explained why Ethereum could reach a price of up to 30,000 USD if companies start treating it in a similar way to how Strategy has treated Bitcoin. Notably, Lee asserted that to achieve this figure for ETH, there is no need to rely on speculation or delusions about value. The key here is a cold and calculated financial strategy that companies can adopt for sustainable growth.

Strategy: Successful lessons are not only due to Bitcoin

To illustrate his theory, Lee cited the example of Strategy, a software company that has seen its stock rise sharply from 13 USD to 455 USD over the period from August 2020 to now. Although Bitcoin has played a significant role in this growth – with the price of BTC soaring from 11,000 USD to 118,000 USD – Lee emphasized that much of the price increase of Strategy is not solely attributed to the rise in Bitcoin, but rather to the smart financial strategy that the company has implemented.

The strategy has used a "treasury bond strategy", which means borrowing, issuing more shares, and accumulating Bitcoin at a faster rate than the price volatility of this cryptocurrency. Lee believes that this approach has created a strong financial leverage, helping to increase the company's stock value in a short period.

Ethereum: Can the success of Strategy be replicated?

Lee believes that Ethereum could be an even more suitable option than Bitcoin for a similar strategy. He points out three financial moves that could help companies leverage Ethereum to increase value:

1. Issue new shares with a higher net asset value, thereby attracting more ETH.
2. Take advantage of ETH's volatility to reduce borrowing costs.
3. Optimize the financial structure by issuing convertible bonds or preferred shares to limit shareholder dilution.

The strength of Ethereum, according to Lee, lies in its strong volatility. This volatility, if harnessed correctly, will help companies not only reduce financial costs but also accumulate ETH at a reasonable cost, thereby achieving rapid and sustainable growth.

Tom Lee does not stop at theory, but also presents impressive real figures. For example, BitMine Immersion Technologies – the company chaired by Lee – has collected over 300,000 ETH in just the first week, equivalent to nearly 1 billion USD. This is an incredible achievement, especially when compared to the initial Bitcoin accumulation strategy of Strategy, which took a long time to achieve a similar scale.

No less impressive, SharpLink Gaming, under the leadership of Joseph Lubin – co-founder of Ethereum – has successfully raised 413 million USD and currently owns over 280,000 ETH. The company does not hide its ambition to continue increasing its ETH holdings in the future. Additionally, Bit Digital, another name, has also sold Bitcoin and stocks to redirect its investment into Ethereum, with a clear goal of becoming the "ETH treasury king."

In total, these three companies currently hold nearly 682,000 ETH, equivalent to about 0.5% of the total circulating supply of Ethereum. This not only reflects a strong investment strategy but also demonstrates that these companies are leveraging financial opportunities to maximize profits from this digital asset, a calculated move aimed at optimizing long-term value.

Feedback Loop: Sustainable Growth

According to Tom Lee, this strategy will create a strong feedback loop: as stock prices rise, borrowing becomes easier and cheaper, allowing companies to buy more ETH at a lower cost. This process not only drives up the value of ETH but also promotes sustainable growth, as accumulating ETH will become easier as the value of these companies and digital assets increases.

Analyst DCInvestor has summarized Lee's prediction succinctly but powerfully:

"Tom Lee believes that ETH could reach 30,000-80,000 USD. However, some people still think that ETH will only stop at 1,000-2,000 USD after reaching the peak of the previous cycle."

Currently, Ethereum is trading around 3,600 USD. If Lee's prediction comes true, the price of ETH could increase 8 times, reaching 30,000 USD. This increase is equivalent to the growth that Bitcoin experienced since Strategy started accumulating Bitcoin, until it peaked in 2021. However, there is a significant difference: while Strategy took years to witness that growth, Ethereum has begun increasing in value and trading billions of USD in just a few weeks.

Although it is still too early to draw a final conclusion, what Lee points out is indeed very noteworthy. If this strategy is widely adopted, Ethereum could very well become a digital asset of unimaginable value. The pivot of companies and the increasing demand for ETH could mark a new turning point in the development of the crypto world.

However, while this scenario may occur in the near future, the big question remains whether Ethereum can maintain this strong growth momentum or will face significant corrections? Time will be the deciding factor. But right now, it can be asserted that Tom Lee's forecasts are not fanciful, but very likely a completely feasible scenario.

Annie