Tom Lee, founder of Fundstrat Global Advisors, which has strong support from the business community, assessed the sharp decline in the cryptocurrency market. Despite the gloomy market sentiment, Lee painted an optimistic picture for Ethereum and the crypto ecosystem in general.
The cryptocurrency market's sharp decline over the past 10 days has seen the value of Ethereum (ETH) fall by around 40%, sparking debate among investors whether it is the end of the world for cryptocurrencies. Appearing on CNBC's “Closing Bell,” Fundstrat founder and Bitmine chairman Tom Lee analyzed the current market situation and made important remarks.
Tom Lee said current market pessimism is “at its lowest point”. Recalling that Ethereum has lost more than 60% of its value seven times in the past eight years, Lee said, “The most important common feature of these declines is that each decline is followed by a 'V'-shaped recovery, meaning a sharp recovery that occurs as quickly as the decline.” Lee predicts that the market is currently searching for a bottom and that the recovery will be just as rapid.
Lee strongly refuted claims of a “death spiral” being voiced by some in the market, arguing that the underlying data of the Ethereum network is strengthening regardless of price fluctuations. According to Lee, the number of active addresses on the Ethereum network has increased by 117% compared to a year ago, and network usage has increased by 80% in the past six months. Additionally, Lee said that a technology with growing uses is not going away, noting that major Wall Street firms (such as UBS, Fidelity, and Standard Chartered) are primarily choosing the Ethereum blockchain for their tokenization projects.
Lee, who is also the head of Bitmine, provided details about the company's financial structure. He said the company is debt-free and generates cash flow of about $1 million every day, adding that its 4.3 million Ethereum holdings generate a 3% annual return and that its cash reserves are invested in money markets. Mr. Lee said, “We do not need a capital increase. Our financial position is very strong, generating approximately $360 million in net income annually.”
*This is not investment advice.
