Tom Lee calls Ethereum grossly undervalued at $1,770 after 64% drop

Ethereum at $1,770 is down 64% from its August 2025 peak, with Fundstrat's Tom Lee calling it one of the most mispriced assets globally.

Ether is "grossly undervalued" relative to bitcoin, gold and equities, Tom Lee, co-founder and head of research at Fundstrat Global Advisors, said.

The token has fallen from nearly $5,000 six months ago to under $2,000 today, erasing more than $300 billion in market value. Ethereum's market capitalization now stands at $213.6 billion, making it the second-largest cryptocurrency behind bitcoin, which commands a 58% market share versus Ethereum's 10%. Bitcoin has declined 47% year over year, while ether is down 41% over the same period.

Lee's endorsement from a Wall Street strategist known for bullish calls could draw value-oriented capital into ether, which has lost more than half its value since August. The question for investors is whether the selloff reflects a structural loss of confidence or a cyclical trough that rewards contrarian entry.

The decline comes despite significant ecosystem developments. Ethereum completed its transition to proof-of-stake in 2022, reducing new supply issuance by roughly 90%. The network also processes more than $3 billion in daily decentralized exchange volume across its layer-2 ecosystem, according to DefiLlama data. Yet ether's price has failed to reflect those fundamentals, Lee argued.

For context, a $1,000 investment in ether two years ago would be worth about $507 today, while the same investment six months ago would be worth roughly $533, illustrating the persistent downward pressure. The token's 52-week low of $1,507 was set on June 6, 2026, less than six weeks ago.

Ethereum's decline mirrors broader weakness across digital assets. Bitcoin has fallen to around $62,539, down 47% year over year, according to CoinGecko data. The two largest cryptocurrencies together represent 68% of the total crypto market, meaning their simultaneous decline has compressed valuations across the sector.

Lee's call introduces a contrarian thesis at a moment when institutional flows remain tepid. Spot ether exchange-traded funds, which began trading in July 2024, have seen mixed demand relative to their bitcoin counterparts. The iShares Ethereum Trust and Fidelity Ethereum Fund have attracted net inflows, but the Grayscale Ethereum Trust has experienced persistent outflows since its conversion to an ETF structure.

This article is for informational purposes only and does not constitute investment advice.