Ether is the native cryptocurrency in the Ethereum (ETH +4.15%) network, which is a leading destination for developers who want to build decentralized software applications. Whenever people use one of these applications, trigger a smart contract, or transfer a crypto token built on Ethereum, they incur a fee that is payable in Ether.
This structure creates ongoing demand for Ether, so as long as the Ethereum network continues to grow in popularity, the cryptocurrency should (theoretically) increase in value over the long term. This scenario seems likely because decentralization is a growing trend, especially in areas like finance, where people value transparent systems with low fees.
Tom Lee founded Wall Street firm Fundstrat Global Advisors, and he's also the chairman of BitMine Immersion Technologies (BMNR +9.79%), which owns $10 billion worth of Ether. He thinks the cryptocurrency could soar to $7,000 per coin heading into the first quarter of 2026, implying a potential upside of 147% from its current level. How realistic is this target?
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Ethereum is leading the decentralized revolution
The Ethereum network has a stellar track record, with zero downtime in the past decade. It owes this achievement to its decentralized structure; rather than using one central data center, the network is hosted on thousands of nodes (computers) worldwide, and each of them stores a full copy of the Ethereum blockchain. Therefore, the network will remain fully active even if some nodes go down, which gives developers the confidence to build their applications on Ethereum.
Decentralized apps are powered by smart contracts, which are pieces of computer code that live on the Ethereum blockchain. They lay out the rules governing how the app functions, and they can't easily be changed, which protects the app from manipulation by humans or companies. In other words, smart contracts ensure that apps stay decentralized.
CRYPTO: ETH
Key Data Points
Thousands of decentralized apps have been built on Ethereum so far. Uniswap is one of the most noteworthy, because it has become a highly popular exchange for investors who are looking to trade their cryptocurrencies for other cryptocurrencies. Pricing and execution are handled entirely by smart contracts, with no intermediaries. Users don't even need to make an account -- they can simply connect their crypto wallets to Uniswap directly and start trading.
When a person uses Uniswap, they activate smart contracts, which trigger fees payable in Ether. Therefore, as applications like this one become more popular, they could drive further upside for the cryptocurrency.
Tom Lee thinks Ether could more than double in the next few months
Ether hit a record high of $4,946 per coin back in August, but it has since plummeted 42% amid a sell-off in the broader crypto market. Tom Lee was bullish before the recent volatility, and he certainly hasn't changed his tune.
He thinks decentralized applications could replace the entire financial system over the long term, and he's betting Ethereum will power the transition. Lots of work is happening in this area already, with innovations like stablecoins transforming how people send money across borders. According to Cathie Wood's ARK Invest, $15.6 trillion in payments were processed using stablecoins in 2024, which is more volume than both Visa and Mastercard processed.
Lee believes Ether could soar 2,090% to reach $62,000 per coin by 2035 if his vision for a decentralized financial system comes to fruition. However, in the shorter term, he thinks the cryptocurrency could climb 147% to $7,000 per coin in the next few months alone, as investors swoop in to buy the recent dip.
How realistic are Lee's targets?
A price of $7,000 per coin would only be a 40% increase from Ether's recent record high. Plus, at $7,000, Ether would have a market capitalization of around $845 billion, so it would still be eclipsed by Bitcoin's $1.7 trillion valuation. Simply put, this target is certainly achievable, but it will take a big shift in sentiment to spark a rally that powerful in such a short period of time.
Lee's target of $62,000 per coin, on the other hand, is a little less realistic in my opinion. Even though Ether has a decade to get there, it would give the cryptocurrency a market cap of $7.5 trillion, making it significantly more valuable than the world's largest companies today. It's a possible outcome if Ethereum really does underpin a decentralized revolution in the financial sector, but it's going to face competition.
The Solana network, for instance, is another popular place for developing decentralized apps, and it improves on some of Ethereum's shortcomings. Its hybrid proof of stake (PoS) and proof of history (PoH) validation mechanism allows thousands of transactions to be processed per second, whereas the Ethereum network often runs into congestion issues after just 15 transactions per second. This also brings down costs, so Solana offers much lower fees.
In summary, there is no guarantee Ethereum will remain at the front of the decentralized revolution forever, which is something investors should keep in mind before following Lee into Ether. Plus, it's important to remember he is the chairman of BitMine, which owns roughly 3.5 million Ether coins worth over $10 billion, so he has a vested interest in making bullish forecasts.
