Ethereum Undervalued by 299% Says Fundstrat's Tom Lee

Fundstrat's co-founder and chief investment officer, Tom Lee, has expressed his belief that Ethereum (ETH) is significantly undervalued by the market. In a recent interview, Lee suggested that a fair market value for ETH could be as high as $10,000, representing a more than 299% increase from its current value. Lee's optimism is rooted in the market value of projects built on the Ethereum blockchain, particularly Circle, the issuer of the second-largest dollar-pegged stablecoin USDC and the euro-pegged Euro Coin (EURC). Both USDC and EURC were initially launched on the Ethereum blockchain.

Lee highlighted that Circle, which has had a successful initial public offering (IPO) and is considered one of the best equities in recent years, trades at around 100 times its earnings before interest, taxes, depreciation, and amortization (EBITDA). He argued that stablecoins, which operate on layer-1 blockchains like Ethereum, should command a higher valuation multiple due to the multiple applications sitting on top of them. According to Lee, if the world were to realize the potential of tokenizing more assets and these tokenized assets traded at high multiples, Ethereum's value would be significantly higher.

Lee's analysis suggests that Ethereum is undervalued when compared to Circle's valuation relative to its layer-1 status. He posited that if tokenized assets, such as tokenized dollars, were to trade at 100 times EBITDA, the blockchain itself should be valued much higher. Lee's forecast is based on the premise that Ethereum benefits from the multiple applications built on top of it, which should command a higher valuation multiple.

Lee's comments come at a time when ETH is trading at $2,502. His bullish outlook on Ethereum is grounded in the potential for increased tokenization and the high valuation multiples of projects built on the Ethereum blockchain. Lee's analysis underscores the potential for Ethereum to reach a much higher valuation if the market recognizes the value of the projects built on its platform.