Original author: Weilin, PANews
On Wall Street, 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.
Lee was recently appointed as the chairman of the board of directors of mining company Bitmine and participated in the companys $250 million Ethereum treasury strategy, which has attracted widespread attention in the market. In a recent interview, Tom Lee boldly predicted that Ethereum will climb to $10,000 in the current market cycle.
Bitmine announces $250 million Ethereum treasury strategy, appoints Tom Lee as chairman of the board
Mining company Bitmine Immersion Technologies (BMNR) recently publicly announced a $250 million private placement plan to fund its Ethereum treasury strategy, a move similar to MicroStrategys adoption of a Bitcoin treasury strategy.
On July 3, Bitmine 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, and others.
At the same time, 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 is long bullish on cryptocurrencies. His early and unwavering belief in Bitcoin and technology stocks has earned 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 crypto treasury strategy is a powerful narrative driver, it also brings new volatility risks. Bitmines 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 for supporting 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 its trading market value is 100 times EBITDA (earnings before interest, taxes, depreciation and amortization, a financial indicator used to measure the profitability of a company before deducting interest, taxes, depreciation and amortization), which has brought very good performance to some funds and helped them enter the top 1%. So from the perspective of traditional Wall Street, 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.
Lee pointed out that this really proves 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, he likes stablecoins. He thinks this will be a $2 trillion market, which is a 10-fold increase. 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 Lee
Lee further noted that he believes Ethereum is a direct beneficiary of Wall Street’s attempts to give cryptocurrencies the attributes of stocks.
What are the advantages of the treasury strategy compared to simply buying Ethereum?
Talking about the Tom Lee effect of BMNRs stock rally, Lee 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 the Treasury Company.
“If people buy an ETF, or buy Ethereum on-chain, the units of Ethereum you hold will be fixed, meaning if you buy the ETF, there will be a portion of Ethereum on the contract, and it can shrink because of fees. But these treasury companies, their goal is to increase the amount of tokens per share, and Microstrategy’s benchmark is this key performance indicator. So number one, if it’s trading above net asset value (NAV), they can issue shares and create more NAV 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 in a treasury asset company, the cost of capital is lower. But you can sell volatility through convertible bonds or derivatives. And, in Microstrategys 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 price. So if something is trading at the net asset value price, 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 benefit.
The fifth point is that you can create what I call a structured put option. For example, Microstrategy has 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 has 600,000 bitcoins. So, I pay a 200% premium, which is cheaper than paying $1 million to buy Bitcoin. This is called a sovereign put option.
But in the Ethereum world, because its a staking token, if these treasury companies own 5% of 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 options of Wall Street, which is a very logical way of thinking.
Early career: 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. 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.
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, Lees research attracted critics, especially in 2002 when public company Nextel publicly criticized his research, which attracted national media attention. The dispute made headlines in the Wall Street Journal. In 2014, Lee left JP Morgan to start his own research consulting firm, Fundstrat Global Advisors, and became the companys head of research. He is also an advisor to Connecticut wealth management company NewEdge Wealth.
Lee was the first major Wall Street strategist to provide formal Bitcoin research to clients, a move that received widespread media attention at the time. Lee is known for his deep insights into the market and accurate long-term forecasts. His analysis includes forecasts for the SP 500, views on market rebounds, and comments on specific stocks such as MicroStrategy and Tesla. In addition, Lee discusses the impact of inflation and Federal Reserve policy on the market.
Recently, he predicted that the SP 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 Lee has been criticized for his optimistic market forecasts, his supporters highly value his institutional-level perspective and deep understanding of market trends.
