Tom Lee Continues to Buy Ethereum Dip as Prices Drop – What Still Supports ETH in the Long Term
Ethereum has faced repeated pressure in recent months, with its price falling sharply amid broader weakness across the digital asset market. Risk aversion, forced liquidations, and declining speculative appetite have weighed heavily on major cryptocurrencies, pushing Ether well below its previous cycle highs.
However, despite mounting losses on paper, one high-profile investor continues to double down.
Bitmine Inc., Tom Lee’s cryptocurrency-focused investment firm, has continued to accumulate Ethereum even as the asset trades well below the company’s average purchase price. The move has caught the attention of the entire crypto community, raising a key question: what supports the long-term value of Ethereum when prices are under such pressure?
Bitmine Adds More ETH Despite Market Weakness
According to blockchain data tracked by Arkham Intelligence, Bitmine recently acquired an additional 20,000 ETH, valued at approximately $46 million at the time of purchase. The transaction was executed through FalconX, a major institutional cryptocurrency brokerage, and the funds were transferred to a newly created wallet according to Bitmine’s established accumulation pattern.
With this latest purchase, Bitmine remains the largest known institutional holder of Ethereum. The company now controls approximately 4.285 million ETH, equivalent to approximately 3.55 percent of the total circulating supply of Ethereum.
A significant portion of these holdings are staked in Ethereum’s proof-of-stake infrastructure, allowing the company to earn yield while maintaining exposure to the network’s long-term growth. This approach reflects a treasury strategy rather than a short-term trading position.
Big holdings, big unrealized losses
Bitmine’s condemnation comes at a cost. The company built up much of its position in Ethereum at average prices ranging between $3,650 and $3,883 per ETH. With Ethereum currently trading near the $2,200 level, those holdings represent estimated unrealized losses between $6 billion and $6.6 billion.
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| Source: $BMNR Shares |
While these losses remain unrealized, they underscore the severity of Ethereum’s recent decline and the scale of Bitmine’s exposure.
The pressure has also been reflected in the company’s stock performance. Shares of Immersion Technologies, which trade under the symbol BMNR and are closely associated with Bitmine’s ETH strategy, have fallen sharply along with Ethereum.
On February 3, BMNR closed at $22.35, down nearly 2 percent on the day, before falling further in after-hours trading. Long-term performance has been more severe, with the stock falling more than 20 percent in the past month, more than 46 percent in six months and about 20 percent so far this year.
These declines have intensified scrutiny of Bitmine’s Ethereum-based treasury model.
Tom Lee defends Ethereum treasury strategy
In response to growing criticism, Tom Lee has defended the company’s approach, arguing that the market is misinterpreting both the risks and objectives of an Ethereum-focused treasury.
Lee has emphasized that Bitmine’s strategy is designed to track the value of Ethereum over full market cycles, not to avoid short-term volatility. He noted that large unrealized losses during sharp market declines are a natural and expected characteristic of long-duration cryptocurrency exposure.
According to Lee, the focus is on long-term network adoption, generating yield through staking, and Ethereum’s role as a critical infrastructure for decentralized finance, tokenization, and digital payments.
This perspective aligns with the behavior of other institutional actors who have continued to accumulate or hold ETH during periods of market stress.
Why Ethereum Price Keeps Falling Despite Strong Holders
Ethereum is currently trading around $2,278, down about 2 percent in the last 24 hours and extending its weekly decline to over 23 percent. Since its 2025 cycle peak, Ether has lost more than half its value.
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| Source: CMC |
Importantly, analysts note that this weakness is not due to a failure of the technology or activity of the Ethereum network. Instead, several macroeconomic and market-specific forces are converging.
First, market-wide deleveraging has reduced speculative exposure in crypto assets. As leverage is reduced, prices often shoot lower, regardless of fundamentals.
Second, sentiment has shifted sharply toward fear, and investors have prioritized liquidity and capital preservation over growth assets.
Third, Ethereum’s technical structure remains bearish, with key support levels broken during the recent sell-offs.
Finally, headlines about institutional losses, including unrealized Bitmine withdrawals, have added psychological pressure, although those losses do not reflect forced selling.
Ethereum Fundamentals Remain Strong
Despite price volatility, Ethereum’s on-chain and ecosystem fundamentals continue to show resilience.
The network remains the leading platform for tokenization of real-world assets, with over $11.4 billion in tokenized assets currently deployed. This includes bonds, funds and other tokenized financial instruments increasingly used by institutions seeking blockchain-based settlements.
Ethereum-based exchange-traded funds have also grown significantly. ETH-linked ETFs now hold approximately $13.39 billion in total net assets, highlighting sustained institutional demand even during market downturns.
Stablecoins represent another pillar of Ethereum’s strength. The total market capitalization of stablecoins issued or settled on Ethereum is approaching $160 billion, reinforcing its role as the backbone of the digital dollar infrastructure.
Decentralized exchange activity on Ethereum has also increased. Recent data shows weekly DEX volume of approximately $18.5 billion, representing an increase of more than 56 percent week over week. This suggests that while prices drop, network usage remains active.
Developer participation remains strong and upcoming protocol updates aimed at scalability, efficiency, and user experience continue to attract developers for the long term.
Institutional support extends beyond Bitmine
Bitmine is not alone in its conviction. Other major institutions, including BlackRock and SharpLink, have maintained or expanded their exposure to Ethereum through ETFs, custody solutions, and infrastructure investments.
This broader institutional interest reflects Ethereum’s perceived role as the dominant smart contract platform rather than a speculative asset in its own right.
For many institutions, Ethereum represents a programmable financial infrastructure, supporting decentralized applications, payments, lending, gaming, identities, and tokenized assets.
That long-term thesis remains intact despite short-term price declines.
Ethereum’s outlook towards 2026
Looking ahead, Ethereum enters 2026 under pressure, but not without support. The asset faces ongoing volatility, regulatory uncertainty in some jurisdictions, and competition from alternative blockchains.
However, its network effects, developer ecosystem, and institutional integration continue to differentiate it from its competitors.
If overall market conditions stabilize and risk appetite returns, Ethereum’s strong fundamentals could support a significant recovery. Staking yields, the growth of tokenization of real-world assets, and the expansion of the use of stablecoins provide structural drivers of demand.
At the same time, investors should recognize that Ethereum remains a high-risk asset, subject to strong price swings and macroeconomic shocks.
Final thoughts
Tom Lee’s decision to continue buying Ethereum during a recession highlights a growing divide between short-term market sentiment and long-term institutional conviction.
While Ethereum’s price has struggled, its underlying network activity, institutional adoption, and role within the digital economy remain strong. For investors with long-term horizons, these fundamentals can ultimately offset short-term volatility.
Whether Ethereum’s current slowdown marks a prolonged consolidation or the basis for a future rebound will depend on broader market conditions, regulatory clarity, and continued execution at the protocol level.
For now, the message from large holders like Bitmine is clear: despite the losses on paper, the long-term case for Ethereum remains intact.
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