Tom Lee believes Ethereum could outperform Bitcoin as the ETH/BTC ratio breaks above its long-term downtrend, with tokenization and agentic AI emerging as potential catalysts.
ETH$2,715.44+2.53%
BTC$84,162.00+1.68%BitMine Chairman Tom Lee believes Ethereum may be entering a stronger phase against Bitcoin as the ETH/BTC ratio breaks above a multi-year downtrend.
Lee sees two major catalysts behind the potential shift: tokenization and agentic AI. At the same time, BitMine is slowing the pace of its Ethereum purchases while directing more capital toward share buybacks.
The ETH/BTC ratio compares Ethereum’s price performance with Bitcoin. When the ratio rises, it suggests Ethereum is gaining strength relative to Bitcoin.
According to Lee, the ETH/BTC ratio has historically strengthened during major crypto market cycles. He points to different narratives behind previous moves, including ICOs during 2017-18, NFTs during the following cycle, and stablecoins in 2025.
The latest move could be tied to a different set of use cases.
Lee said the ETH/BTC ratio recently reached 0.02994 and moved above the long-term downtrend that had been in place for several years. He believes the move suggests markets are beginning to recognize the potential impact of tokenization and agentic AI applications on Ethereum.
One of Lee's key arguments is the growing use of blockchain infrastructure by traditional financial institutions.
Tokenization involves representing assets such as securities and other financial instruments on a blockchain. As more financial activity moves onchain, Ethereum could benefit from increased demand for the infrastructure used to issue, transfer and settle these assets.
Lee believes Wall Street's growing interest in onchain settlement could become an important driver for Ethereum.
This would represent a shift from Ethereum's earlier growth narratives. Instead of relying primarily on speculative crypto applications, demand could increasingly come from financial institutions using blockchain technology for real-world financial activity.
The second major theme highlighted by Lee is agentic AI.
Agentic AI refers to software systems capable of taking actions and completing tasks with limited or no direct human intervention. In a blockchain environment, these agents could potentially transact, interact with applications and manage digital assets automatically.
That could create a new source of blockchain activity if AI agents increasingly need programmable payment and settlement infrastructure.
Ethereum's smart-contract capabilities could make it a natural candidate for some of these applications, although the scale of future demand remains uncertain.
Lee's bullish view on Ethereum comes as BitMine's latest treasury update shows a significant slowdown in the company's ETH purchases.
BitMine currently holds 5,815,164 ETH, representing roughly 4.8% of Ethereum's total supply of about 120.7 million ETH.
With ETH trading near $1,902, the company's Ethereum holdings are worth approximately $11 billion. Its total crypto and cash holdings reached around $11.4 billion, including 210 BTC.
However, BitMine added only 9,926 ETH last week.
That is substantially below its average weekly purchase of approximately 59,998 ETH across 43 weeks of reported purchases.
The slowdown has been particularly noticeable recently. The last five weeks have been the only periods in which BitMine purchased fewer than 11,000 ETH since late October.
For comparison, its weekly purchases previously reached as high as 138,452 ETH in December.
Rather than continuing to aggressively increase its Ethereum holdings, BitMine has recently allocated more capital toward buying back its own shares.
The company repurchased approximately 1.7 million shares last week.
Since July 1, BitMine has repurchased approximately 20.8 million shares, which Lee described as the largest buyback carried out by a crypto digital asset treasury company.
This creates an interesting contrast.
BitMine continues to hold a substantial Ethereum position and remains publicly bullish on Ethereum's long-term prospects. Yet its recent capital allocation suggests the company sees value in its own shares as well.
Lee's argument ultimately comes down to whether the next major phase of crypto adoption will be driven by applications that favor Ethereum.
Tokenized financial assets could increase demand for Ethereum's blockchain infrastructure, while AI agents could create new forms of automated onchain activity.
The ETH/BTC ratio breaking above its long-term downtrend provides some support for that thesis, but it does not guarantee that Ethereum will continue outperforming Bitcoin.
Bitcoin remains the dominant crypto asset by market value and continues to attract substantial institutional interest.
For Ethereum, the key question is whether tokenization and agentic AI can become large enough adoption trends to drive sustained demand for ETH.
For now, Lee believes the move in the ETH/BTC ratio is an early signal that the market may be starting to price in that possibility.
Blockchain.com is reportedly targeting a $500 million U.S. IPO at a valuation of $4 billion to $6 billion, well below its $14 billion peak in 2022.
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