- Ethereum has fallen about 60% from its peak, with a recent 35% monthly drop and major holders including Vitalik Buterin and Stani Kulechov selling.
- Bitmine holds 3.6% of the Ethereum supply, faces at least $6.6 billion in unrealised losses, yet continues buying as Tom Lee expects a recovery in 2026.
Ethereum is back in focus as Bitmine Chair Tom Lee forecasts a sharp rebound after a deep price slump. The second-largest cryptocurrency by market value has retreated about 60% from its peak and dropped roughly 35% in the past month alone, trading near $2,000 per token. The pullback comes during a broader digital asset downturn that has erased about $2 trillion in value across the sector. Despite the drawdown and heavy unrealised losses at Bitmine, Lee argues that the current environment could set the stage for a rapid recovery over the next two years.
Historical declines and Lee’s “V-shaped” outlook for Ethereum
Lee expects Ethereum to follow what he describes as a “V-shaped recovery” after its latest selloff, with prices returning quickly to previous highs after a steep fall. He points to historical patterns since 2018, noting that this is the eighth instance in which Ethereum has dropped 50% or more from a recent high. In his view, such deep pullbacks have occurred roughly once a year and have repeatedly been followed by strong rebounds. Based on that pattern, he projects that a similar recovery could take shape in 2026, even though current market sentiment remains weak.
According to Lee, volatility is a persistent feature of crypto markets rather than an exception. He highlights that large drawdowns have previously marked entry points rather than the end of the asset’s long-term prospects. Drawing on earlier cycles, he argues that the most attractive buying opportunities have tended to appear in the aftermath of sharp declines, rather than during periods of steady gains or relative calm.
Investor behavior and pressure on Ethereum prices
The recent decline in Ethereum has coincided with selling by prominent holders, adding to concerns over near-term price direction. In February, major figures in the ecosystem trimmed their positions. Vitalik Buterin, the network’s co-founder, sold at least $7 million worth of tokens to fund new projects. Stani Kulechov, who founded the decentralised finance platform Aave, disposed of over $8 million in holdings. These disposals have weighed on sentiment at a time when broader risk assets are also under pressure.
Lee links earlier episodes of market stress to wider macro events, citing 2025 as a period when crypto assets slumped after a sharp market drop tied to tariff concerns. He recalls that the single most attractive points to enter the crypto market that year emerged directly after those declines, which were triggered by a wave of trade tax threats from then-US President Donald Trump. Both crypto assets and traditional markets reacted negatively as the tariff rhetoric intensified, but those conditions later proved favourable for investors who were willing to buy into weakness.
Bitmine’s Ethereum exposure and mounting paper losses
Bitmine’s aggressive accumulation strategy has left the firm heavily exposed to Ethereum’s price swings. The company now holds 3.6% of the entire token supply and has set a goal of increasing its stake to 5%. That concentration has produced substantial unrealised losses as prices have fallen. Bitmine currently sits on at least $6.6 billion in paper losses from its Ethereum purchases, underscoring the scale of its commitment and the risk tied to its thesis.
The company’s equity performance has mirrored the slide in the token. Bitmine’s share price has dropped about 66% to $21 over the past six months, reflecting investor unease over the downturn and the size of its position. For context, Lee compares the firm’s current losses with the roughly $10 billion hit investment banks took after the collapse of hedge fund Archegos in 2021, an event that prompted market-wide scrutiny and reforms. Although the magnitudes differ, the comparison illustrates how concentrated exposures can reverberate through balance sheets when markets move against them.
Despite the mounting unrealised losses, Bitmine continues to add to its holdings. On Monday, the firm bought just over another $80 million in Ethereum , signalling that it remains committed to its long-term view rather than cutting exposure. Bitmine counts high-profile backers such as Peter Thiel’s Founders Fund and Cathie Wood’s ARK Invest, investors known for taking concentrated positions in high-conviction themes. Lee reiterates that, in his assessment, the strongest investment prospects in crypto have historically appeared after major market drops, and he continues to hold a bullish stance, including a previously stated prediction of a $250,000 price target for the token.
Conclusion
Ethereum’s latest downturn has erased a large portion of its prior gains, leaving major investors like Bitmine with sizeable unrealised losses and its share price under pressure. Selling by well-known figures in the ecosystem has added to the negative tone, while wider market weakness has removed around $2 trillion from the broader crypto space. Even so, Tom Lee contends that the current drawdown is consistent with past cycles in which annual declines of 50% or more have preceded strong rebounds. With Bitmine still increasing its holdings and aiming for a larger share of the token supply, the firm is aligning its strategy with the view that deep volatility can set up future recoveries, and that the years ahead, particularly 2026, could mark another turning point for ethereum.
Disclaimer
The information provided in this article is for informational purposes only and should not be considered financial advice. The article does not offer sufficient information to make investment decisions, nor does it constitute an offer, recommendation, or solicitation to buy or sell any financial instrument. The content is opinion of the author and does not reflect any view or suggestion or any kind of advise from cryptonewsbytes.com. The author declares he does not hold any of the above mentioned tokens or received any incentive from any company.
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