Written by: Weilin, PANews
On Wall Street, Tom Lee is known as the 'Wall Street Oracle', gaining widespread attention for his accurate market predictions and deep insights into tech stocks, Bitcoin, and other assets. As the founder of the analysis firm Fundstrat, he is a well-known analyst in traditional markets and a staunch supporter of digital assets like Bitcoin and Ethereum.
Recently, Lee was appointed Chairman of the Board for the mining company Bitmine and participated in the company's launch of a $250 million Ethereum treasury strategy, which has garnered widespread market attention. In a recent external interview, Tom Lee boldly predicted that Ethereum would rise to $10,000 in the current market cycle.
Bitmine announces a $250 million Ethereum treasury strategy and appoints Tom Lee as Chairman of the Board.
The mining company Bitmine Immersion Technologies (BMNR) recently publicly announced a $250 million private placement plan aimed at funding its Ethereum treasury strategy, a move similar to MicroStrategy's adoption of a Bitcoin treasury strategy.
On July 3, Bitmine's stock price soared over 1,000%, sparking enthusiastic discussions and speculation among investors. This fundraising was led by MOZAYYX and supported by some of the active institutions in the current crypto investment community, including Founders Fund, Galaxy Digital, Kraken, Pantera, Republic Digital, DCG, and others.
Meanwhile, Bitmine also announced the appointment of Tom Lee as Chairman of the Board. Lee is the founder of Fundstrat and a well-known strategist who has a long-term positive outlook on cryptocurrencies. His early firm belief in Bitcoin and tech stocks has earned him loyal followers on Wall Street.
Although the surge in stock prices has attracted widespread attention, it has also been accompanied by warnings. Analysts have pointed out that while crypto treasury strategies are powerful narrative drivers, they also bring new volatility risks. The future of Bitmine will be closely tied to the trends of Ethereum, and in this area, sentiment changes can be very rapid. For investors who are optimistic about the long-term application of Ethereum, direct investment may be a more straightforward and less volatile option.
Tom Lee: 'Stablecoins will cause Ethereum's transaction fees to grow exponentially.'
In a recent interview, Tom Lee stated that he likes Ethereum because it is a programmable smart contract blockchain, and the rise of stablecoins supports Ethereum. He mentioned Circle, a recently popular stablecoin public company valued at $9 billion. 'Circle is like the best IPO of the past five years, and its trading market cap is 100 times EBITDA, bringing excellent performance to some funds and helping them enter the top 1%. So from the traditional Wall Street perspective, Circle is like a god-tier stock, and stablecoins are like ChatGPT in the cryptocurrency space, as they have broken into the mainstream market,' he said.
Lee pointed out that this indeed proves that Wall Street is trying to give tokenized assets stock-like attributes, while the crypto world is tokenizing stocks as they have tokenized dollars. People are now seeing that JPMorgan wants to launch its own stablecoin, and Amazon, Walmart, and Goldman Sachs are also paying attention. Stablecoins are a very good business model and are highly effective for consumers and merchants. But they must operate on the blockchain, and most stablecoin transactions occur on Ethereum.
'Ethereum has been overlooked. Currently, the total size of the stablecoin market is only $250 billion, which accounts for 30% of Ethereum's transaction fees, and Ethereum creates over 50% of stablecoins annually. Treasury Secretary Scott is very fond of stablecoins. He believes this will be a $2 trillion market, a tenfold increase. The U.S. government wants more stablecoins because stablecoins collectively have become the 12th largest holder of U.S. Treasury bonds. If the creation of stablecoins increases tenfold, it will lead to exponential growth in Ethereum's transaction fees,' Lee said.
Lee further pointed out that he believes Ethereum is a direct beneficiary of Wall Street's attempts to give cryptocurrencies stock-like attributes.
What are the advantages of a treasury strategy compared to merely purchasing Ethereum?
Regarding the 'Tom Lee Effect' on BMNR stock price surge, Lee stated, if I'm going to invest in Ethereum, why not just buy the ETF directly? Or why not buy it directly on-chain and hand it over to a custodian? But in reality, treasury companies have five very important aspects.
'If people buy an ETF or purchase Ethereum on-chain, the units of Ethereum you hold will be fixed, meaning that if you buy an ETF, there will be a portion of contract-based Ethereum, which might shrink due to fees. But these treasury companies aim to increase the token amount per share, with Microstrategy's benchmark being this key performance indicator. So the first point is that if its trading price is above net asset value (NAV), they can issue stocks and create more per-share net asset value, which is what they call reflective growth. I think there is very little in the stock market that reflects growth like this.'
He stated that the second reason is that the underlying tokens are very volatile; in fact, Ethereum's volatility is twice that of Bitcoin. If people hold an Ethereum ETF and want to leverage more Ethereum ETFs, banks can charge a 10% fee. But if you are in a treasury asset company, the funding cost is lower. However, volatility can be sold through convertible bonds or derivatives. Moreover, in the case of Microstrategy, the capital cost is zero, so you can now leverage two times.
He further mentioned that the third leverage is the gap between market price and net asset value. Investors have equity, and other treasury companies are also trading net asset prices. Therefore, if something is trading at net asset value pricing and you trade at three times the price, you can engage in mergers and acquisitions to purchase other treasury companies. So, in essence, this is like arbitrage.
The fourth point is that you can create an operating company. For instance, we can create a business that helps the DeFi ecosystem by providing Ethereum staking loans. This is not common in Bitcoin but is actually a huge benefit in Ethereum.
The fifth point is that you can create what I call structured put options. For example, Microstrategy has 600,000 Bitcoins. If the U.S. government wants to purchase 1 million Bitcoins, or the UAE or the UK also wants to buy 1 million Bitcoins, someone might say, I can buy Microstrategy because the U.S. government already owns 600,000 Bitcoins. So, I pay a 200% premium, which is cheaper than paying $1 million to buy Bitcoin. This is known as a sovereign put option.
However, in the Ethereum world, because it is a staking token, if these treasury asset companies own 5% of Ethereum, they become very important to the ecosystem. Therefore, their market value should rise. If Goldman Sachs launches a dollar token that operates on Ethereum, they would ensure the security of the Ethereum network. So ultimately, they would purchase a large amount of Ethereum. But these staking entities already own it. Therefore, perhaps they will only purchase the rights of the staking entities. Thus, the staking entities hold Wall Street's put options, which is a very logical way of thinking.
Early experience: The first major strategist on Wall Street to provide formal research on Bitcoin for clients.
Looking back at Tom Lee's personal background, his original name is Thomas Jong Lee, and his parents are Korean immigrants. Lee earned a Bachelor of Science in Economics from the Wharton School of the University of Pennsylvania, majoring in Finance and Accounting, and is a CFA charterholder. He is also an active member of the New York CFA Society and the Economic Club of New York.
Lee's career began in the early 1990s, working at Kidder, Peabody & Company and Salomon Smith Barney. In 1999, he joined JPMorgan Chase & Co as Chief Equity Strategist. During his time at JPMorgan, Lee's research attracted criticism, particularly in 2002 when the publicly traded company Nextel publicly criticized his research, drawing nationwide media attention. This dispute made headlines in the Wall Street Journal. In 2014, Lee left JPMorgan to found his own research consulting firm, Fundstrat Global Advisors, and he became the research director of the company, while also serving as an advisor to NewEdge Wealth, a wealth management firm in Connecticut.
Lee is the first major strategist on Wall Street to provide formal research on Bitcoin for clients, a move that attracted significant media attention at the time. He is known for his deep insights into the market and accurate long-term predictions. His analysis includes forecasts for the S&P 500 index, views on market rebounds, and comments on specific stocks like MicroStrategy and Tesla. Additionally, Lee discusses the impact of inflation and Federal Reserve policies on the market.
Recently, he predicted that the S&P 500 index would rise by 10% in 2025 and believes that while the current market rebound is positive, it has yet to gain the trust of most investors. Although Lee has faced criticism for his optimistic market outlook, his supporters highly praise his institutional-level perspective and deep understanding of market trends.
