Fundstrat chief of research Tom Lee says Ether’s recent sell-off should be seen as an opportunity, arguing that network fundamentals remain robust and the price drop is driven by non-fundamental forces. According to CoinGlass, ETH is on track for its third-worst Q1 on record, down roughly 21% year-to-date.
Lee points to continued growth in on-chain activity: Ethereum recorded a daily transaction peak of 2.8 million on Jan. 15, and active addresses in 2026 have reached about 1 million per day. He contrasts that with the crypto downturns of 2018 and 2022, when transaction counts and wallet activity fell—something not observed over the past 12 months. From this, Lee infers that fundamentals do not explain the recent price weakness.
He attributes the decline mainly to two factors. First, leverage has not returned to crypto markets since the Oct. 10 crash, removing a source of upside momentum. Second, a rally in precious metals has drawn risk appetite away from crypto, a dynamic Lee describes as a ‘vortex’ sucking capital into metals and out of risk assets.
Lee’s Ethereum treasury vehicle, BitMine, appears to be positioning for a rebound. Over the past week BitMine added 41,788 ETH, with Lee calling the pullback “attractive given the strengthening fundamentals.” BitMine now holds about 4.28 million ETH, roughly 3.55% of total supply, and is roughly 70% of the way toward its 5% target. Around 2.87 million ETH of the treasury is staked. Despite the accumulation, the treasury’s paper losses neared $7 billion as prices fell.
Most of the recent decline happened within a week, when ETH plunged more than 25% from near $3,000 to a low around $2,200 before a modest recovery. Lee’s view is that the present weakness reflects temporary market dynamics rather than deteriorating network utility, and that current prices understate ETH’s role in the future of finance.
This report summarizes statements and on-chain data cited by Tom Lee and public sources. Readers should verify details independently.