Funstrat co-founder Tom Lee says Ethereum could be the crypto market leader in the near term, aiming to rise to $12,000 by January thanks to Wall Street’s tokenization push and rising growth expectations for smart contract platforms. In an interview published on November 10 with Tom Nash, Lee noted that while Bitcoin remains underowned, “there will be more movement in Ethereum” over the coming weeks as capital reallocates toward the rails that power stablecoins and tokenized assets.
Why Ethereum is poised to rally soon
Lee anchored his call to a mix of technical and fundamental factors. Quoting Funstrat’s head of technical strategy, he noted: “Mark Newton (…) thinks we could get to $9,000 to $12,000 by January. I think that’s about right. I think Ethereum (…) will more than double by the end of the year or by January.” At the same time, he said that Bitcoin could reach “the highs of $100,000, maybe even $200,000 by the end of the year”, while reiterating that Ethereum probably has the greatest upside potential in the near term.
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The crux of Ethereum’s thesis, as Lee explained, is that demand for crypto is shifting toward applications that rely on smart contracts — precisely the area in which Ethereum is most entrenched.
“Even Cathie Wood has written about this. She thinks stablecoins have cannibalized demand for Bitcoin and gold, and tokenized gold cannibalizes demand for Bitcoin. But stablecoins and tokenized gold run on smart contract blockchains like Ethereum,” he said. He added that “Wall Street is building and Larry Fink wants to tokenize everything on the (…) blockchain. That means Ethereum is where people start raising their growth expectations.”
Lee argued that this change in growth expectations is as important, if not more, than overall monetary policy over short windows. While acknowledging that the Federal Reserve remains a critical context, he presented a possible December easing as a catalyst for broader risk assets – financials, small caps and technology – and, by correlation, for cryptocurrencies. “If they cut rates in December, they confirm that they are in an easing cycle,” he said, calling it “really bullish” for stocks most closely tied to growth and liquidity. In Lee’s framework, these same flows support crypto assets, and Ethereum in particular, in year-end positioning.
The fund manager also located the crypto pattern within a broader “super-cycle” that it has been mapping for years. He says markets are still in the early stages of an AI-driven investment boom and a demographic regime that keeps demand for productive technologies high. This context, he added, has repeatedly wrong-footed bears who have relied on yield curve inversions and 1970s inflation analogues.
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“People have a hard time understanding and comprehending super cycles… we look for narrative arcs that last 10 to 15 years,” he said, arguing that the past three years have exposed “mass misconceptions” about recession and persistent inflation that have never been reconciled with reported profits.
The macro backdrop
Stressing the risks of the move, Lee downplayed the idea that inflation is poised to re-accelerate and argued that oil would need to approach levels near $200 to cause a real growth shock for U.S. households. “The most overestimated risk is that inflation returns,” he said, pointing to cooling housing and labor indicators and saying recent claims about warming basic services inflation were “completely false” when compared to the PCE series.
On policy path dependence, he suggested that even a December hold on Chairman Powell would likely accelerate political pressure for a change in leadership, thereby mitigating the medium-term impact on risk assets.
In terms of timing, Lee sees positioning as a short-term accelerator. He argued that institutions remain below their benchmarks after repeated downturns during the 2023-2025 period and that the final weeks of the year often force a shift to outperforming segments. “There is incredible demand for stocks because people are really out of the picture (…) 80% are behind their benchmark this year (…) they are going to buy stocks,” he said, adding that AI trading is “going to come back with a vengeance” and that crypto tends to correlate with that move.
For Ethereum in particular, Lee’s case boils down to a simple guideline: the pipes being built are where the next stage of growth accumulates. Stablecoins, tokenized gold, and the broader Wall Street tokenization program are transactions that run on programmable blockchains; the market, in his opinion, is only beginning to take this into account. “If you increase your growth expectations, then your discount going forward increases,” Lee said, explaining why he thinks ETH can “take a big step forward towards the end of the year” and hit the $9,000-$12,000 range by January.
At press time, ETH was trading at $3,447.
Featured image created with DALL.E, chart from TradingView.com
