Bitmine's Tom Lee Warns of a Potential Sell-Off in Ethereum. Here's the Most Likely Scenario for ETH.

Cryptocurrency trades 24/7 globally, making it particularly susceptible to sharp market movements taking place around the world. Case in point: A recent heavy sell-off in South Korean tech stocks has panicked investors, who are now concerned about the arrival of Chinese competitors into the memory chip market.

According to Tom Lee, chairman of Ethereum (CRYPTO: ETH) treasury company Bitmine Immersion Technologies (NYSE: BMNR), this sell-off has huge potential implications for crypto. Most notably, it could lead to a sell-off in Ethereum, the one digital asset that his company has been hoarding since June 2025.

How global markets affect Ethereum

On the surface, there might not be a clear connection between Ethereum and what's happening in South Korea and other Asian markets. Here's the thing: The overseas tech sell-off has already resulted in forced liquidations. In turn, says Lee, this activity could lead to a wave of "secondary" liquidations.

That's where crypto enters the picture. South Korea is a hotbed of crypto activity, and many tech investors there are also crypto investors. Thus, some investors could be forced to sell off their crypto holdings, partly as a way to make up for the losses now being incurred on their tech stock holdings.

Image source: Getty Images.

The good news, if you're an Ethereum investor, is that Lee is predicting only "short-term pain," and not a total market collapse. Thus, the selling pressure on Ethereum might be relatively brief. Indeed, in the aftermath of the Oct. 13 sell-off, Ethereum has stabilized in price.

However, there's another scenario that not many people want to talk about: the bursting of the AI bubble. If investors eventually give up on AI, that will result in everything AI-related getting sold off. That includes U.S. tech stocks, as well as tech stocks across Asia. In turn, those losses will seep into the global crypto market.

In that case, it won't be "short-term pain." It will be "long-term pain." Ethereum is already down 50% from its August 2025 highs, and trades for just $2,450. It's hard to see how Ethereum would get back to the $5,000 price level anytime soon if there is a total collapse of the AI trade.

Diversify, diversify, diversify

That's why it's so important to diversify your portfolio. That's the only way to protect against a large-scale collapse in any market segment. Unfortunately, right now, many cryptocurrencies are trading like tech stocks, and that has made them particularly vulnerable.

The one thing that Ethereum has in its favor is that investors continue to view it as much more of a financial infrastructure play than a pure-play tech stock. That's due in large part to Ethereum's market-leading position in decentralized finance (DeFi).

That being said, if you're thinking about investing in Ethereum, just keep in mind that it's a truly global asset. Significantly more crypto gets traded on offshore exchanges than on U.S.-regulated exchanges such as Coinbase Global (NASDAQ: COIN). So what happens in one part of the world overnight has a real chance to affect what happens to the future price of Ethereum, sometimes before you even wake up for breakfast.

Dominic Basulto has positions in Ethereum. The Motley Fool has positions in and recommends Ethereum. The Motley Fool recommends Coinbase Global. The Motley Fool has a disclosure policy.