Why is Tom Lee, who manages $13 billion worth of ETH, optimistic about ETH outperforming BTC? The betting logic of institutional giants

The crypto market has once again welcomed a significant voice. Recently, Tom Lee, Chairman of Bitmine and a well-known strategist on Wall Street, stated that Bitcoin is expected to hit a new all-time high this year, but Ethereum will outperform Bitcoin. This prediction comes from a decision-maker who manages the world’s largest Ethereum treasury, and the underlying logic is worth a close look.

Who Made This Prediction

Tom Lee is not an ordinary market commentator. As Chairman of Bitmine Immersion Technologies, he oversees the largest Ethereum holder among enterprises globally. According to the latest data, Bitmine holds approximately 4.16 million ETH, with a total holding value of about $13 billion, accounting for 3.36% of the global Ethereum supply. This means his prediction is not just an opinion but also a form of betting—his capital allocation decisions directly influence the market.

Why Optimistic About BTC Hitting a New High

The current Bitcoin price is about $95,220. From recent performance, BTC has increased by 5.04% over the past 7 days and 8.24% over the past 30 days, showing a clear upward momentum. Tom Lee’s logic for expecting BTC to reach a new high is mainly based on a few points:

Market Recovery Momentum

The crypto market is recovering from policy uncertainties. Although the U.S. “Digital Asset Market Transparency Act” (CLARITY Act ) has been delayed, this delay also reflects a gradual rationalization of dialogue in the market. As macroeconomic conditions improve and institutional allocations increase, Bitcoin, as the largest crypto asset, is expected to break through previous highs.

Supply Scarcity

The circulating supply of Bitcoin has reached 19,977,415 coins, with a fully diluted scarcity level of 95.13%. As more institutional holders lock in supply, market liquidity is constrained, opening up room for upward movement.

Why Ethereum Might Be Even Stronger

This is the most interesting part of Tom Lee’s prediction. He believes Ethereum will not only rise but also outperform Bitcoin. Several core factors underpin this judgment:

The Power of Supply Compression

Bitmine and other Digital Asset Treasury (DAT) companies are massively allocating to Ethereum. According to information, these institutions have accumulated about 5 million ETH and are staking it. This directly reduces the ETH supply on exchanges—some analyses indicate that the ETH balance on exchanges is even lower than BTC. Tight supply usually leads to stronger upward momentum.

Staking Yield Support

Bitmine expects its Ethereum holdings to generate over $400 million in annual pre-tax income, mostly from staking. This provides additional economic incentives for holders and helps stabilize the price floor.

Imagination Space of the DeFi Ecosystem

Tom Lee is optimistic about the “influencer ecosystem + DeFi” chemical reaction. Bitmine recently invested $200 million in Beast Industries, behind MrBeast, aiming to leverage its 461 million YouTube followers to promote Ethereum DeFi and digital reward ecosystems. This new narrative of creator economy combined with crypto opens up new growth space for the Ethereum ecosystem.

Institutionalization Path

Market observers point out that ETH is replicating the institutionalization path that BTC followed from early 2023 to the end of 2024. Increased institutional holdings, locked supply, and ecosystem development—this combination has historically brought significant gains to BTC.

Current Market Challenges

It is important to note that the market still faces pressure. Recent comments from Federal Reserve officials have been hawkish, emphasizing that inflation pressures remain. This adds macroeconomic pressure to the crypto market. Currently, Bitmine’s ETH holdings are still showing a loss of $2.3 billion, indicating that even institutional giants are experiencing volatility.

Summary

Tom Lee’s prediction reflects an important trend: institutional capital is systematically allocating to crypto assets, especially Ethereum. His optimism about BTC reaching a new high is based on market recovery and supply scarcity, while his confidence in ETH outperforming BTC stems from a combination of supply compression, ecosystem expansion, and DeFi innovation.

However, whether this prediction will come true ultimately depends on macroeconomic conditions and market sentiment. Currently, BTC is approaching $95K, close to its all-time high; ETH needs to seek a breakthrough driven by ecosystem development and institutional allocation. Future developments to watch include the progress of the CLARITY Act, Federal Reserve policy movements, and the practical implementation of DeFi ecosystems within creator economies.