Author: Weilin, PANews
Tom Lee is known as the "Wall Street Calculator" and has won wide attention for his accurate market forecasts and deep insights into technology stocks, Bitcoin and other assets. As the founder of the analysis agency Fundstrat, he is not only a well-known analyst in the traditional market, but also a staunch supporter of digital assets such as Bitcoin and Ethereum.
Recently, Tom Lee was appointed as the chairman of the board of directors of mining company Bitmine and participated in the company's $250 million Ethereum treasury strategy, which attracted widespread attention in the market. In a recent external interview, Tom Lee boldly predicted that Ethereum will climb to $10,000 in the current market cycle.
Bitmine announces $250 million ETH treasury strategy, appoints Tom Lee as chairman of the board
Mining company Bitmine Immersion Technologies (BMNR) recently publicly announced a $250 million private placement to fund its Ethereum treasury strategy, a move similar to MicroStrategy’s adoption of a Bitcoin treasury strategy.
On July 3, Bitmine's stock surged more than 1,000%, sparking heated discussions and speculation among investors. The fundraising was led by MOZAYYX and supported by some of the most active institutions in the crypto investment community today, including Founders Fund, Galaxy Digital, Kraken, Pantera, Republic Digital, DCG, etc.
At the same time, Bitmine also announced the appointment of Tom Lee as chairman of the board. Tom Lee is the founder of Fundstrat and a well-known strategist who is bullish on cryptocurrencies for a long time. His early firm belief in Bitcoin and technology stocks has won him a loyal following on Wall Street.
Although the surge in share prices has attracted widespread attention, it also comes with warnings. Some analysts point out that although the cryptocurrency treasury strategy is a powerful narrative driver, it also brings new volatility risks. Bitmine's future will be closely linked to the trend of Ethereum, and in this area, sentiment can change very quickly. For investors who are optimistic about the long-term application of Ethereum, direct investment may be a simpler and less volatile option.
Tom Lee: “Stablecoins will increase Ethereum transaction fees exponentially”
Tom Lee said in a recent interview that he likes Ethereum because it is a programmable smart contract blockchain, and the reason he supports Ethereum is the rise of stablecoins. He mentioned Circle, a recently popular stablecoin listed company with a valuation of $9 billion.
“Circle is like the best IPO in five years, and it’s trading at 100 times EBITDA, which has given some funds very good performance and helped them get into the top 1%. So from a traditional Wall Street perspective, Circle is like a god-level stock, and stablecoins are like ChatGPT in the cryptocurrency field because it has broken through into the mainstream market,” he said.
Tom Lee pointed out that this does prove that Wall Street is trying to make tokenized assets have the attributes of stocks, and the crypto world is tokenizing stocks because they tokenize the US dollar. People now see that JPMorgan Chase wants to launch its own stablecoin, and Amazon, Walmart, and Goldman Sachs are also paying attention. Stablecoins are a very good business model, and they are very effective for consumers and merchants. But they all have to run on the blockchain, and most stablecoin transactions occur on Ethereum.
"Ethereum was once ignored. The total size of the stablecoin market is only $250 billion, it accounts for 30% of Ethereum transaction fees, and Ethereum creates more than 50% of stablecoins every year. Treasury Secretary Scott Bessent, he likes stablecoins. He thinks this will be a $2 trillion market, which means it will grow 10 times. The US government wants more stablecoins because stablecoins collectively have become the 12th largest holder of US Treasury bonds. If the creation of stablecoins increases 10 times, it will cause Ethereum transaction fees to grow exponentially," said Tom Lee.
Tom Lee further pointed out that he believes that Ethereum is a direct beneficiary of Wall Street's attempt to give cryptocurrencies stock attributes.
What are the advantages of the treasury strategy compared to simply purchasing Ethereum?
Speaking of the "Tom Lee effect" of BMNR's stock rally, he said, "If I want to invest in Ethereum, why not just buy an ETF? Or why not just buy it on the chain and give it to a custodian." But in fact, there are 5 very important aspects of treasury companies.
If you buy an ETF, or buy ether on-chain, the units of ether you hold will be fixed, meaning if you buy an ETF, there will be a portion of ether on the contract, and it may shrink because of fees. But these treasury companies, their goal is to increase the amount of coins held per share, and Microstrategy's benchmark is this key performance indicator. So the first point is, if it's trading above net asset value (NAV), they can issue shares and create more net asset value per share, which is what they call reflective growth. I think there are very few things in the stock market that reflect growth like this.
The second reason, he said, is that the underlying tokens are very volatile, in fact, Ethereum is twice as volatile as Bitcoin. If people hold Ethereum ETFs and want to buy more Ethereum ETFs with leverage, banks can charge 10% fees. But if you are at Treasury Asset, the cost of capital is lower. But you can sell volatility through convertible bonds or derivatives. And, in Microstrategy's case, the cost of capital is zero, so you can now pull two levers.
He further said that the third lever is that there is a gap between the market price and the net asset value. Investors have equity, and there are other treasury companies that are also trading at the net asset value price. So if something is trading at the price of the net asset value, and you trade at three times the price, you can do mergers and acquisitions and buy other treasury companies. So, in fact, it is like arbitrage.
The fourth point is that you can create an operating company. For example, we can create a business that helps the DeFi ecosystem and conduct Ethereum collateralized loans. This is not common in Bitcoin, but in fact on Ethereum, this is a huge advantage.
The fifth point is that you can create so-called structural short options (put options). For example, Microstrategy holds 600,000 bitcoins. If the US government wants to buy 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 US government already owns 600,000 bitcoins. So, I pay a 200% premium, which is cheaper than paying $1 million to buy Bitcoin. This is the so-called sovereign put option.
But in the Ethereum world, because it's a staking token, if these treasury companies own 5% of the Ethereum, they are very important to the ecosystem. So their market cap should go up, and if Goldman Sachs launches a dollar token, and this token runs on Ethereum, they will ensure the security of the Ethereum network. So ultimately, they will buy a lot of Ethereum. But these staking entities already own it. So, maybe they will only buy the rights of the staking entities. So the staking entities have the put rights of Wall Street, which is a very logical way of thinking.
Early Experience: First major Wall Street strategist to provide formal Bitcoin research to clients
Looking back at Tom Lee’s personal experience, his original name was Thomas Jong Lee. His parents were Korean immigrants. Tom Lee received a bachelor’s degree in economics from the Wharton School of the University of Pennsylvania, majoring in finance and accounting. He is a CFA Chartered Financial Analyst and an active member of the CFA Society New York and the Economic Club of New York.
Tom Lee began his career in the early 1990s, working at Kidder, Peabody & Company and Salomon Smith Barney. In 1999, he joined JP Morgan Chase & Co as chief equity strategist. While at JP Morgan, Tom Lee's research attracted critics, especially in 2002 when the public company Nextel publicly criticized his research, which attracted national media attention. The dispute made headlines in the Wall Street Journal. In 2014, Tom Lee left JP Morgan to start his own research advisory firm Fundstrat Global Advisors, and became the company's head of research. He is also an advisor to Connecticut wealth management company NewEdge Wealth.
Tom Lee was the first major Wall Street strategist to provide formal Bitcoin research to clients, a move that attracted widespread media attention at the time. Tom Lee is known for his deep insight into the market and accurate long-term forecasts. His analysis includes forecasts for the S&P 500, views on market rebounds, and comments on specific stocks such as MicroStrategy and Tesla. In addition, he often discusses the impact of inflation and Federal Reserve policy on the market.
Recently, he predicted that the S&P 500 will rise 10% by 2025, and believes that the current market rebound, while positive, has not yet been given credit by most investors. Although Tom Lee has been criticized for his optimistic market forecasts, his supporters highly value his institutional-level perspective and deep understanding of market trends.
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"Tom Lee, the Wall Street Calculator, has become a big ETH bull. Why is he so optimistic about Ethereum?" This article was first published on (Blockker).
