Not Only Ethereum: Owner of 4.9% of All ETH, Tom Lee, Is Bullish on Small Caps

Tom Lee, chairman of the board of crypto company Bitmine Immersion Technologies, which controls 4.9% of the world’s Ethereum supply — more than 6 million ETH — said that traditional U.S. small-cap stocks are significantly undervalued. In the investor’s view, the Russell 2000 index has become a “coiled spring” in October 2026. 

Lee’s signal matters beyond the stock market: a turnaround in small businesses has historically served as a leading indicator for rallies in low-cap crypto assets.

The shift in focus at Fundstrat was prompted by JPMorgan Equity Strategy data showing a historic anomaly: short positions against Russell 2000 companies had surged to the 99.8th percentile. Median short interest exceeded 8% of shares outstanding. 

Such extreme bearish sentiment in traditional markets points to an inevitable short squeeze — a forced closing of positions that can send prices sharply higher in a cascading move.

Why a turnaround in U.S. small businesses will revive small caps

For the crypto industry, where Lee’s company is the largest institutional staker of Ether, this move signals preparation for a global shift in liquidity. Fundstrat forecasts that softer U.S. labor market data will ease hawkish pressure from the Federal Reserve, while the 10-year Treasury yield will fall below 5%. Lower Treasury yields will automatically restart risk-on mode. 

The freed-up liquidity will flow first into Russell 2000 stocks, then inevitably into low-cap crypto assets and undervalued altcoins, which have suffered from a lack of attention in recent months as Bitcoin dominated the market.

Despite localized pressure from the U.S. midterm elections, Fundstrat is maintaining its annual S&P 500 target of 8,200–8,400 points. Business fundamentals remain strong: third-quarter earnings per share (EPS) growth is approaching 30%, which has led to lower valuation multiples.

Lee’s strategic bet on the Russell 2000 shows that, while Ethereum itself and other major digital assets are going through a prolonged consolidation phase, smart money is seeking the highest returns at the bottom of the traditional market, laying the groundwork for a near-term “altcoin season.”