Bankless - The World’s Largest ETH Holder - Tom Lee on Treasuries, Ethereum Dominance, and Wall Street

Episode Date: August 6, 2025

In this episode, we talk with Tom Lee, chairman of Bitmine, about the rapid growth of his ETH treasury company and its goal to secure 5% of the total ETH supply. Tom believes Ethereum could surpass Bitcoin in value, forecasting potential prices between $4,000 and $15,000. We discuss market dynamics, risks of excessive leverage, and his insights on valuing Ethereum and NFTs like Pudgy Penguins.  Tune in for key insights into Ethereum’s future and Wall Street’s role in crypto. ------ 📣 LISTEN TO THE EXCLUSIVE DEBRIEF: https://www.bankless.com/podcast/debrief-tom-lee-treasury ------ BANKLESS SPONSOR TOOLS: 🪙FRAX | SELF SUFFICIENT DeFi https://bankless.cc/Frax 🦄UNISWAP | SWAP ON UNICHAIN https://bankless.cc/unichain 🛞MANTLE | MODULAR LAYER 2 NETWORK https://bankless.cc/Mantle ------ TIMESTAMPS 0:00 Intro 2:57 The Rise of ETH Treasuries 8:27 The 5% ETH Strategy 12:08 The Role of Ethereum in Wall Street 17:57 Accumulating More ETH 26:39 Wall Street's Misunderstanding of Crypto 29:41 Ethereum's 2017 Moment 37:09 The Potential for 100x 45:52 Estimating ETH's Value 50:08 Navigating Market Risks 59:36 Closing Thoughts on Ethereum ------ RESOURCES Tom Lee https://x.com/fundstrat ------ Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures

I think the upside case for ETH is actually higher than, let's say, Bitcoin did 100X. You know, could Ethereum do 100X? I think that that could happen because there is probably a significant probability that Ethereum could flip Bitcoin as well in terms of network value. Bankless Nation, we have Tom Lee here, legendary Wall Street investor, chairman of the newly launched Heath Treasury Company, BitMine. The ticker is BMNR. Tom, welcome back to bankless.

Yeah, thanks. Good to see you guys again. It's great to see you. It's been about a year, and you've been pretty busy. I got to say, I did not have on my bingo card that Tom Lee in 2025 would create an ETH treasury company, and yet here you are at the time of recording, Bitmine, where you chair, has 833,000 ETH. That's closing in on 1% of all ETH supply. And you are now, I believe, the largest ETH treasury company in the world, at least publicly traded company. How does that feel? Well, I guess, I mean, we move very quickly because we started this, announced it on June 30th, and it closed on July 8th. So in, you know, like in 27 calendar days

since the close, we've moved at very high velocity to acquire this ETH quickly. But I think it's important because micro strategy really has demonstrated that his 30 times return, his pivot when micro strategy was $13 in August 2020 to now, you know, Bitcoin made a big step move from 11,000 to 120,000. But his treasury strategy delivered another 20x on top of that. That's how he got a 30x total return. And I think Ethereum is one of the biggest macro trades over the next decade. So we want to move quickly because we want to get as much ETH at, you know, $3,500 or whatever before it makes its step function gain, similar to what Bitcoin's done in the last five years. Unlike micro strategy, Tom, when you launched Bitmine and just announced that you were doing

the ETH Treasury Company strategy, other ETH treasury companies were hot on your heels. It coincidentally, or maybe not coincidentally, ESPET from Joe Lubin Consensus, which Sharpling Gaming was announced within like, five days of you announcing yours. And now there's a whole host of ETH treasury companies. Did you know that there were others that were hot on your heels? How did all of this happen all at once? Why did this all happen seemingly in the same like two-week period? Maybe great minds think alike. I don't know. You're right. You're right. There have been for a long time, there were just Bitcoin treasuries. And then a couple of Salana treasuries and a couple of hype ones.

but Sharplink was the first Ethereum treasury. That was announced in May. So we were behind, you know, we came after Sharplink. But I think that, you know, Ethereum itself makes a lot of sense to do as a treasury play. Because one, if you're positive on ETH itself, then that's the reason to do a treasury strategy, especially over an ETF, because the functions of a treasury. Treasury strategy lets you get stack more ETH. But the second is ETH, I think actually that because of staking and the proof of stake that

these treasury companies are essentially infrastructure companies and in exchange you're getting paid, you know, a yield for native staking. And that makes them into real businesses, you know, like for instance, the over $3 billion worth of ETH that we hold today, you would earn native staking over 3%. And that's essentially gap net income. But the third reason, of course, is that, you know, it's important to create scarcity. You know, I think that the story that we have at Bitmine is one of scarcity because we have a very clear strategy of trying to acquire 5% of ETH.

And we have a pristine balance sheet. You know, I think that's a big advantage. And the stock is super liquid. You know, it trades $1.6 billion a day, which makes. makes it the 42nd most liquid stock in the U.S. stock market today. Actually, Uber, we trade about the same as Uber every day. And I'm just going to check Uber's market cap. But I think, you know, Bitmines, you know, about $4 billion.

And Uber's market cap is $184 billion. So we trade as much as Uber despite a $4 billion market cap versus $183 billion. Tom, let's talk about that 5% number because I've heard you say that before. and we're just like adding up some numbers here, 5% of total ETH supply. So that'd be about 6 million or so ETH. Yes. You're at 833,000 now, but have gotten to that number in like four weeks. So you're moving very, very fast there.

Are you serious about 5% of all ETH? From my recollection, micro strategy, they've been at this for a while since 2020. I believe micro strategy is up to like 3% of Bitcoin or so. and they've been dollar cost averaging in over time, 5% of all ether, you know, I guess that the current market price is what, like, you know, 20 billion or so,

but I assume you can't get there overnight, especially at these prices. How in the world do you get to 5%? And are you serious about that number? Or is 5% kind of a placeholder? It's just kind of like, yeah, we'd like to someday 5%, that sounds good. Or are you serious about it?

And do you have an execution plan to get to that 5%? And if so, what does that look like? Well, Microstrategy is 3.2% of the network's circulating supply right now. But, you know, micro strategy wants to get to at least a million Bitcoin, which is about 5%. And keep in mind that once Microstrategy has a million Bitcoin, they have a sovereign put. You know, they are strategically important to the Bitcoin ecosystem. I mean, if the U.S. wants to create a strategic Bitcoin reserve, it's probably difficult for the U.S. to buy a million Bitcoin in the open market because as soon as they announce it, sellers are going to shrink and, you know, Bitcoin could go to a million dollars right away.

So micro strategy might be an easier way for someone to get to a million Bitcoin. So I call that a sovereign put. Micraestrategies achieved the 3% in five years. So they were buying basically 16 cents worth of Bitcoin a day, every day for the last five years. Bitmine is, if you look at it from inception to now, has added about 80 cents to dollar per day in Ethereum. So it's about 12 times faster than microstructure. strategy. So we would be on a path to get to 5%, presumably, like at 12 times the speed of micro strategy.

But it makes sense because, you know, we would be a benevolent entity in the sense that we are doing everything 100% compliant with what is the idea of a legally compliant. I theorem is a legally compliant blockchain. and everything that Bitmine is doing is keeping every single piece of the operations in the United States. So it is very compliant to what Wall Street and the U.S. government would want to see in someone who is staking a lot of ETH. And equally important, you know, ETH itself is going to be really where so much of Wall Street financializes on the blockchain. So eventually, I think someone on Twitter made the point that staking eth for Wall Street is like gamers buying Nvidia, that you would have done better to buy Nvidia as well as be a gamer or be a gaming company. But because of, you know, really how blockchains work, it is actually that exact idea that Wall Street is,

if they're going to be tokenizing real world assets from money markets to dollars to stocks, that they're going to want to own ETH itself, but then they want whoever staking it to actually be an entity that is really trying to further the goals of Ethereum. So I think we really serve an important purpose by staking ETH, you know. Tom, if you say you're moving at the current pace 12x faster than micro strategy, I mean, that puts you to 5%. If you continue that pace in about like one to two years, basically, which would be breakneck speed.

Do you think a same kind of sovereign put strategy exists for ether, the asset, as it does for Bitcoin? I've heard you say that all of the commercial banks, the JP mortgage of the world coming on chain, genius bill, stablecoin legislation. This is effectively treasuries and the U.S. central bank coming on chain with their dollars. Ethereum is, of course, leading the pack there. Is there a similar sovereign put type option where the U.S. government or some other sovereign nation, I guess you're legally compliant in the U.S.

You'd hope it would be the U.S. government comes to you one day and says, hi, Tom, bitmine, we noticed has a lot of ETH. We want to buy ETH for the U.S. Treasury, U.S. Central Bank, put it on our balance sheet. And we know you have a lot. Can we do an OTC deal? Do you think that's a possibility here? Look, I think everything you just said is actually rational. It makes sense.

but let's say that our goal isn't to have a put. Like if you just fast forward and Wall Street, right, so Genius Act, SEC wants to move the financial system onto the blockchain. And Ethereum is the largest blockchain, but it's also compliant with U.S. laws. It's a legally recognized blockchain. But this blockchain, of course, can be used by other countries and other nations. the U.S. obviously wants to strengthen the U.S. position and dominance on this blockchain. And of course, keep in mind that there's not just one storyline here coming onto Ethereum.

It's also AI, right? You know, if you're going to tokenize, whether it's robots or other things, you know, you want a blockchain that also, again, can be secured. So tech and Wall Street are converging onto Ethereum. Does Goldman Section J.P. Morgan want Ethereum to be held in like million. of different wallets. Not that they're trying to centralize it, but they want to make sure that the staking is done in a compliant way. And not everybody is going to choose to do that. But that's what we said from the beginning. The idea is that BitMine has a pristine balance sheet, super clean,

you know, no exotic capital structure. And everything that is being done, and we haven't denounced our staking solution, but we're taking our time because, first of all, you know, $3 billion of ETH, it's a big decision, but it's also going to be completely compliant with Gap and actually how the U.S. would want that to be staked. So I think it's a very thoughtful approach we're taking, but yes, I mean, everything you just said, like let's say, because I don't disagree. And it just shows you Ethereum treasury companies are critical infrastructure. It's not just

a treasury play. And in exchange for that, you're earning a staking yield at a minimum, but they could be earning other ways of generating income. So I think you're highlighting that these Ethereum treasuries aren't just like an alternative to an ETH. They are playing a really important

role in the ecosystem. Right. One thing I can't figure out, Tom, and I think some ethibles are with me on this, is how in the world ETH is still trading under 4K. When you just talked about in a month's time, you now have $3 billion in ETH in the Bitmine treasury. So $3 billion in ETH purchases,

how does that not move ETH price be like 4K and above? Like how are you still getting a bid at, you know, 3,500 ETH? Where's all this ETH coming from? And how is it not moving our price here? Well, we've learned a lot. I don't really want to say too much. Because as you can imagine, we've probably been one of the largest buyers of ETH. And we've learned a lot.

And I would say in this short term, where fair value for Ethereum is, does not play into what ETH does short term. I mean, look at it last week, it got to $3,300 on, it would be. because there are folks who have liquidation levels, or they're doing pair trades, or people think Ethereum's a dead chain, so they're betting on another chain and trying to force levels of liquidation. I think that that's the dynamic near-term,

but wasn't that Bitcoin at $1,000 in 2017? Like, actually, if people go back to 2017, because I think Ethereum is having its Bitcoin 2017 moment this year, where Wall Street is finally getting behind ETH, you know, Bitcoin was 1,000 in the early part of 2017, and it was until August, and then it went straight up. I mean, literally went straight up.

We've definitely haven't seen this level of Wall Street interest in ETH, the asset, and Ethereum the network in like four or five years now. And, I mean, we're seeing the appetite from Wall Street coming in all different corners of the Ethereum ecosystem. When people ask you about why ETH, why buy an ETH treasury company over a Bitcoin treasury company if they're shopping around? Because there are treasury company options out there. There's been micro strategy.

There's not only just micro strategy for Bitcoin. There's others. And then, like as you alluded to, there's like a hype treasury company. There's an Athena treasury company. So when you explain why specifically Ease, like what is resonant about ether the asset and the treasury company model? over something like Bitcoin or any other alternative treasury company? Well, first, I'm a big fan of Bitcoin, you know.

I think Bitcoin is the way. And I, you know, our work on the fundstress side shows Bitcoin can get to the million, million a half dollar per coin. So Bitcoin still has a huge story ahead. Yeah, but Bitcoin and Ethereum operate on different parts of how the world is financializing. and that's the principal difference to me because Ethereum represents the world

financializing onto the blockchain, which is not Bitcoin's goal, and the AI world, creating basically a digitally native way to bridge the real world and, you know, digital security. So that's to me why Ethereum, someone wants to own Ethereum treasuries

because I would buy Micro Strategy if I was looking at this. And by the way, it is a granny shot in the FundStrat ETF. But the reason is that Microstrategy is growing your Bitcoin holdings every day. So you're going to outperform Bitcoin. Ethereum treasuries are really the only way for a U.S. equity investor

to get exposure to Ethereum unless they're buying Ethereum. directly or an ETHETF. But if you're an institution and you, this is one of the biggest themes, I don't think they're going to just say, well, in my fund, my $50 billion large cap fund, Ethereum's the biggest trade, so I'll buy J.P. Morgan. They might, but they're better off saying, how can I be directly exposed to Ethereum? And they can't really buy an Ethereum ETF because that's not within the parameters of their

fund. So I think to me, the U.S. equity market, professional investor, looks at ETH, you know, Ethereum Treasuries as really the only way to get exposure to ETH as a macro trade. And that's why, you know, you've seen like the Kathy Woods make a big investment in Bitmine and Bill Miller. Today we announced that he made a major investment last week into Bitmine. So they're institutional investors. They're both, both of those folks are OGs and crypto, realize this is the best way to have

macro exposure to Ethereum. In addition to just like the MNAV premium, which has mostly been, I'm, Micro Strategies, strategy for bootstrapping itself into buying more Bitcoin and accumulating more Bitcoin, ether treasury companies have a bit of extra tools in their tool belt, simply by nature of what Ethereum is, right? Ethereum has like an on-chain defy ecosystem that Ethereum treasury companies can actually leverage. So my question to you is, what's your strategy for accumulating more eth using the additional

tools at your disposal? because all treasury companies are leveraging the MNAV premium in order to accumulate more respective assets under their balance sheet. But there's other strategies beyond just kind of like extracting the premium to accumulate more ether. What else? What other strategies? Assuming ignoring the MNAV premium,

how else do you get ether on your guys' balance sheet? Yeah, David, of course, you're asking a great question. and I have many answers of which I can't really share most of them. Because whatever strategy we pursue, you know, some of this is very proprietary. But, you know, I would say investors shouldn't oversimplify their thinking around treasuries because we, you know, we've become the third largest crypto treasury in the world. after Mero blockchain and micro strategy. So we own more crypto than metaplanet.

And so then you realize that companies that are of significant size and liquidity don't simply have to be doing like singular things, you know. So that's probably the difference. Tom, why does an MNAV premium even exist? Can you talk about this? because I've heard some investors talk about this, and their basic view is the MNAV premium should kind of collapse, somewhere around one, maybe a bit above one.

Of course, in bear markets, it could trade under one. But why is there an MNAV premium in the first place for any crypto treasury company? Yeah. Can I walk you through that? Please. Okay. Because it's a very good question.

Okay. I want to start with a numerical thing, and then give you the non-numerical. Let's say that someone buys us, and Bitmine is very strict on cost structure. So it's basically with $3 billion of Ethereum, let's say, oh, you're like, okay, you're just an ETF. So let's say you put it at one times nav, okay?

But then there's a native yield of 3%. And let's say you pay that out as net income. But let's say you go, oh, well, let's just give it a money market multiple. So you gross it up. So it's a 20 times multiple of your 3%. Okay. That's adding 0.6 to your nav because of what you earn on the yield. Does that make sense?

So we're already at 1.6 just because of eat staking yield, basically? Then the third, there's two other components to value. You have to account for velocity because when we started the ETH strategy on July 8, there was only $4 of Ethereum Health per Share. And now when we announced on July 27th, there was $23 of Ethereum Help per Share. And it's much higher today. We haven't disclosed it, but it's higher.

So it's grown by $19 a share in 20 days, roughly. That's velocity. You have to give a velocity because when you do nav, the nav is growing. So you have to give a multiple to that nav growing. Microstrategy is getting a 0.7 for adding 16 cents of Bitcoin a day. But we're doing it 12 times faster. So if you did the theoretical math, we should be getting more than, it should be 0.6, which is micro strategy's premium, but 12 times faster times 12. Now, I'm not saying that it'll be what's priced, but think about it, that's like six points of nav.

So that's just velocity. And then there's liquidity because, you know, after micro strategy trades about $3 billion trading a day, we're the second most liquid crypto treasury out there because we trade we trade 1.6 billion a day like Metaplanet for instance

and I'm a big fan of what MetaPlanat's doing but they're trading like I don't know $50 million a day so we have like a quantum log function of liquidity so that should be worth a premium too so I think like Bitmine

just should be one times plus the yield gives you 0.6, so 1.6. And then how much value do you give for the velocity? And we know micro strategy is getting 0.6 for adding 13 cents a day. And we're 12 times faster. And then what's the premium you should pay for liquidity? Because liquidity is how you can issue other instruments at lower cost. So there's a liquidity premium to this product. And a velocity premium.

Yeah, the liquidity premium you get. by being kind of the biggest and baddest and kind of like deepest, right? But the velocity premium, which is kind of interesting, let's dig into that, because there's the velocity of in the first month you've moved 12x of the speed of micro strategy. The question, though, is, is that sustainable for the next, you know, let's say 11 months, right, for an entire year? Talk about that. So how are you able to get that level of ETH velocity in terms of the, you're purchasing? And can that level actually be maintained? Well, that's a functional liquidity right so it's liquidity and velocity are like two aspects of the same characteristic

we're able to have a lot of velocity because of our liquidity I'll give an example so today we trade like as of 2 p.m. we've traded 800 million dollars of dollar traded volume today and micro strategy has traded, well, $3 billion. So they've gotten a lot. But Ether machine, which is the third largest holder of Ethereum, traded $7 million today. So we traded 100 times the volume of ether machine. And then like BTBT, I believe they're the fourth largest holder.

They traded $49 million today. So you can see there's a huge different. in liquidity, which affects your velocity, because everything that you do to get, velocity requires your stuff to be super liquid. Let me ask the same question for velocity, though. So if you're saying, hey, the velocity comes from liquidity, and the question is, where's the liquidity come from? So, you know, like, how do you get more of that?

Yeah. So I think, well, that's probably the synergy of the team because it's myself, you know, as chairman, but our lead investor in BitMine from the private investment was Mosaics. And they're a really well-known, very smart macro hedge fund. But that's how we were able to attract folks like Founders Fund and, you know, Stan Druckin Miller was revealed in the registration statement as a holder. And of course, the ARCS and the Bill Miller. I mean, you have literally the biggest blue chip names in traditional markets and VC backing Bitmine. That's one element is that it's obviously the people believe the vision. The second is that I've been a

long-time proponent of crypto, you know, and the convergence. And now, and, you know, we really argued forcefully in 2017 that Wall Street would care about Bitcoin starting in 2017. That was really the year that I became an institutional product, right? And ownership grew from there. This is, Ethereum is experiencing its 2017 moment right now. And that's, you know, I think that

is logical to the folks that know us. And I think that that's helping support what the Ethereum treasures are all trying to accomplish. Of course, I'm really supportive of like Sharplink and what they're trying to do. And Andrew Keyes, because because we're all doing the same thing. We're trying to stake Ethereum to make it a secure U.S. blockchain.

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Follow Mantle on X at Mantle underscore official. for the latest updates on blockchain for banking. That's X.com slash mantle underscore official. Tom, there's a lot of people listening who came to crypto later than 2017. I'm not one of them. I remember seeing you in 2017 on CNBC. And you appeared to me the only guy in a suit who would go on traditional finance, Bloomberg, squawk box, all of these things, and talk about Bitcoin. And talk about it in a way that resonated, I think, to those in crypto and those.

that saw the Bitcoin story, can you bring, you've made reference to a 2017 moment for Ether. And maybe you could bring folks back to what you mean by that. 2017, you're comparing it to Bitcoin in 2017 and how it was perceived on Wall Street. Make that connection for us. What was 2017 Bitcoin like? And how is this similar to Ether right now? Yes. I'd be happy to give the backstory. In, In 2017 at Fundstra, Fundstra, Fundstra is a macro and thematic firm. So we write about big story arcs.

We began to do work that led us to Bitcoin, which was we did two different studies. One was we were studying millennials. And in 2017, millennials were, and the oldest was mid-20s, okay? But we realized that they were, there were going to be a huge driver of the U.S. economy. So that was eight years ago.

Today, it's accepted that millennials were big. But our work that we did on millennials was actually so eye-catching that we ended up partnering with Snapchat to do several white papers talking about how millennials would be a cohort that you need to monetize. Snapchat was trying to convince advertisers then to do Gen Z and millennial-specific advertising. Believe or not, like Pepsi and these guys thought it was just about. Gen X, okay? I know it sounds weird, but that was the story.

But the second thing we discovered was that we noticed Bitcoin, like, because I was at J. Moran, it was like $100 and when I left in 2014, and we talked about it in 2012. And then suddenly it was like a thousand. I was like, whoa, you know, it's $100 billion. I've never seen anything go to $100 billion that didn't have something behind it. So at FundStrat, we spent several months trying to understand Bitcoin. And I never fully understood it, but I found that it was driven by two, very two explainable things. One is that it was 97% of that move of Bitcoin from 100 to 1,000 was the number of wallets and the activity per wallet.

I mean, basically, a network value effect. And we could simply say, in the next couple years, if more people use Bitcoin, it's going to go up exponentially again. So we thought it would reach by 2022, $25,000, but it could even go to $100,000 if it got to 5 to 10% of the value of gold. So we started to really push that story as Wall Street needs to understand Bitcoin because it's digital gold. And you're right, Ryan, like maybe other people said it, but we were really the first Wall Street firm to push it to the institutional universe. And remember, zero percent of institutions had ownership of Bitcoin. It was 100 percent retail. And as you know, in the last eight years, Bitcoin has the biggest narrative is it's digital gold.

That's a store value. Of course, it's a great payment system, everything else. But really what's resonated is that there's a group of people that own gold. And we did studies back then to show gold was primarily owned by baby boomers. So millennials would own Bitcoin the way boomers. owned gold. So it was a generational story on top of a, you know, digital substitution story. That's sort of the backstory. And I did many webinars. You know, actually at Fundstrat, believe it or not, we lost, we got fired from our institutional clients. We actually had a

decline in paying clients at Fundstrat because they thought we completely lost our mind. They said, how can you even recommend something that only drug dealers and dark web people to use, use and you're saying it's a legitimate asset class. And so our reputation was actually harmed. But as you know, Bitcoin now is 120,000. So it was 120x. Our clients that invested it and followed us, because we recommended 1 to 2%,

for some, it became 100% of their portfolio. So they've gone full DGEN as a result. And I think that's happening with Ethereum today because Ethereum's been kind of a dormant chain. people wanted faster networks, you know, or more novel ways to do essentially validation, but Ethereum's had zero downtime. That is what matters to Wall Street, zero downtime in 10 years. So I think that Wall Street has already decided Ethereum is the chain.

They're going to build Wall Street onto, and it's lower than it was five years ago. There's been a lot of recent things that has happened in the last like six months. The Circle IPO was just absolutely gangbusters. Coinbase stock has performed very well. Robin Hood has launched or announced the incoming launch of its layer two on Ethereum. And then this word tokenization is just taking off like wildfire. There's a lot of things happening that in the background are all supported by Ethereum. You know, Circles USC grew and was born.

on Ethereum. Coinbase, the largest crypto public company is building an Ethereum layer two. Robin Hood, a traditional finance company, is building a layer two. If they're not even a crypto company, they're a normal stratify company coming into crypto and like legitimizing some of the technology being born here.

Does Wall Street understand that like Ethereum is the backbone for a lot of the movements that are happening? And is that why you think there are some, there's just incredible tailwinds behind these Heath Treasury companies, or is that like a narrative that I'm spinning up in my head? Well, David, you're, everything you've described 100% logic fits. But Wall Street doesn't connect until they can start making money. I'll give an example.

Many of your, these listeners owned Apple for years or Amazon for years or Nvidia for years. Invideo is a great, a good example. That is an exponential growth stock. But as you know, there have been times when Nvidia's done nothing for a year, like literally dead money or Palantir, dead money for years. And then suddenly has a step function

where the market's like, oh, wait, not only do I get it, we have to reprice it. That's what's happening to Ethereum now because we know on-chain activity is searched to all-time highs, right? So Ethereum is, the community has been regalvanized because the price, of course, has recovered,

but also more people are using Ethereum. And then it's very obvious that the Genius Act really benefits a smart contract blockchain. As much as it benefits Bitcoin, but Bitcoin won't host a stable coin. So do I think that the fact that Ethereum is not at 15,000 today is a bad sign? I've seen this before.

I mean, you know, we've recommended Tesla and we've recommended Nvidia, and it's a granny shot since 2019, in Fundstract Capitals, ETF, and it's been part of the research portfolio for a long time. It has not tracked revenues. It has moved in step functions. And I think Ethereum, look, I'd love to see it stay here for five years because that means we can acquire it at a much more attractive price. I mean, if it is at 17,000, that's much more expensive for the Ethereum Treasury.

to acquire Ethereum. Of course, their stock prices will benefit, but to me, it's actually a great that it's actually here. So like 2017 Wall Street did not understand Bitcoin. You're saying 2025, Wall Street still doesn't understand ether the asset. Maybe they're starting to get it. And it's hard for me not to see the fractal pattern, because at that time, I remember you back in 2017, and we're talking about like Bitcoin price. It was something in the 2000s, 3,000, something like this, and you would go on traditional finance, as you're doing with Ether now, but you go on a squawk box or something and say something that they thought was audacious. You'd call 25K Bitcoin price, 40K Bitcoin price, those types of audacious numbers. I'm not surprised to hear

you say, yeah, a lot of people at Wall Street thought we were crazy, and they stopped giving us their money for a period of time. But that trade, that investment proved incredibly right. Now, we see ether at similar numbers, right? It's like Bitcoin was, you know, around the 3,000's in 2017 when you first started telling Wall Street about it. Well, now Ether is at 3,000, which, you know, and you're calling for, I think, some pretty high prices. At least these are blowing minds in traditional finance for Eath. Do you think it could do a similar thing as Bitcoin did? Like, what's your kind of call for a price for Ether right now? I actually think that there's upside, a bigger upside story to Ethereum because there's more skepticism to start with.

Bitcoin wasn't necessarily something people shorted. They just didn't believe it. And so the upside case, you know, like when we wrote about 100,000 in 2017, it seemed insane, but it didn't take that long from 2017 to now to get there. You know, it was within our lifetimes that it was 100x. And Ethereum, I think you're hitting it spot on, is just like Bitcoin in 2017. Wall Street is not professionally convinced Ethereum is even a surviving chain

because there was some fair criticisms and it did move to proof of stake. And there might have been too much ETH out there for a bit of time, but it's being fixed. And there's still skepticism that Wall Street going on to ETH, they're even going to stake Heath or even use Eith. Everyone's kind of more, there are probably more people who think that it's a layer two story

and nothing benefits to layer one. And I think that that's what's going to be shattered. And when it does, it'll be a step function. So I think the upside case for ETH is actually higher than let's say Bitcoin did 100x. You know, could Ethereum do 100X? I mean, Joe Lubin sort of has that kind of upside in his mind. because Joe and I are in dialogue.

I mean, we are really partners in trying to push ETH as a treasury, as a digital infrastructure. And I think that that could happen because there is probably a non, a significant probability that Ethereum could flip Bitcoin as well in terms of network value. And then so then if you're, you know, if someone thinks Bitcoin's at a million, then imagine and what it means for Ethereum, because it is not just Wall Street financializing onto blockchain, but it's AI, but it's also part of the U.S.

focus on AI dominance, right? Ethereum plays a strategic role there. Now, if micro-strategy had tripled the upside of Bitcoin, then that means, in theory, the Ethereum treasuries could triple whatever Ethereum could do. So, you know, like, I don't think you're going to go wrong saying that the Ethereum treasuries are,

a good investment class. But if you're looking at what Bitmines doing, it's those other things I was saying, distinguish it. And that's why, you know, maybe we will be at the front end of that. But they should all do well because Ethereum itself is under value. I think maybe you're blowing some minds with some of these calls, even in crypto terms. So 100x of Ethereum at this point in time, would that be about $40 trillion? And you also said that there's the possibility here that Ether actually flippins Bitcoin, which is not canon, I would say, among crypto natives. There are a lot of Heath supporters and Heath Bulls who have believed this for a very long period of time. But in the more immediate term, I don't know how distant that 100x future is,

where do you see Ether price going, say, the end of this year, or maybe even the end of this cycle, if you still think in terms of cycles, if you think this will play out in the next, you know, 12 to 18 months, let's say, where do you think we go? Sure. Well, I think the near-term price people should think about is Ethereum getting to 4,000. Because Ethereum should be, is a better story than it was in December, and it was 4,000 in December. So like, to me, we should at least recover to that level. And then Ethereum is a better story today than it was a year ago.

And a year ago, Ethereum was at 0.05 ratio to Bitcoin. Right. To me, it's a stronger story. and there's reasons people are using Ethereum. So it's like a narrative. Well, at 0.05 Bitcoin, it's like almost 6,000. So just like saying give it credit for where it is a year ago, versus a year ago, it should be 6,000.

But of course, there is going to be a lot happening between now and year end, including other Ethereum Treasury is starting to buy Ethereum plus Bitcoin goes up. So I think before, by the year end, it's not unreasonable to think 7,000, even 12 or 15,000 could happen. And of course, from there, then in 20206, the Fed starts to follow through on it's what it should be a dubbish pivot.

So central bank liquidity is rising. And so Ethereum should build upon those price levels. I don't know if there's a crypto cycle. There should be. it would play in our favor because again, we'd rather Ethereum, I'd personally think that an Ethereum Treasury company

wants Ethereum to be flat for the next five years and then go up a lot. But it's probably not. It's probably just going to have a step function. But again, just to give you an idea, like when I first wrote about the S&P in 2009, S&P earnings were $65 in 2007. And I built a model at JABorgan that says we would get to $60 by 2010.

Okay, so remember the stock market fell almost 80%. I don't remember. We had a huge decline. And every strategist didn't have a recovery to all-time high in earnings for five years. And so the by side was very skeptical of the idea of $60 by 2010. But that would imply the S&P was at 10 times earnings. at the bottom in 2009, 2009. And lo and behold,

S&P earnings was over 60 by 2010, okay? And today S&P earnings are 300. So S&P earnings have grown exponentially. That's just the traditional corporate world. So the idea that crypto's network value could be 20 trillion for Bitcoin, it's we witnessed it in our lifetimes with equities. So, and also,

like crypto treasuries are asset-based valued on their balance sheet. You know, micro-stratage is valued really on its balance sheet, not on its earnings power. Keep in mind from 1990 to 2018. Okay, so one full generation of someone's career, Exxon Mobile was the top five largest company in the S&B 500 for that entire period. 1990 to 2018. You know, there was Internet and all that, but Exxon was top five. it was never valued on earnings.

It was always priced to proven reserves. So crypto treasuries are just the new Exxon. Tom, you talk about models and trying to put some numbers behind reasoning about the valuation of crypto. I think it's one of our favorite pastimes here at Bankless to try and do this. And at some point, we also understand that, you know, to some degree, these things are inherently unmodelable. You know, like Coinbase, Robin Hood, Circle, they're all building on Ethereum. Layer 2 is are building on Ethereum. organization is on Ethereum.

These narratives, I think, carry a lot of weight when it comes to the value of East, the current price of ETH. But when you actually try and, like, unpack the price of ETH, how do you actually do that? Do you think of this in terms of, like, the demand for Ethereum with its transaction fees? Do you think about the demand for Ether as a store of value inside of DFI apps or for people that want to stake it? How do you unpack the value, the price of ETH? Yeah.

that's a good question um i would probably posit this with david have you seen anyone's spreadsheet model explain bitcoin's price correctly i think it's a fun activity to try but but i mean in practical has never been done i don't think it's ever been done no one year head no one's model has ever served to explain everything so i i would say people who are trying to model eth based on a spreadsheet are the same people that try to come up with an S&P price target based on their bottoms of earnings model or their ISM. And that's why no one gets the S&P call correct. Because to me, there's a phrase I learned when I first started on Wall Street, which is it takes a whole lot of PE to offset E. People spend too much time modeling the E. That's the spreadsheet thing you're

talking about. But it's actually always about P.E. Ethereum's price is not going to be based on the contemporaneous transactions recorded in any single week. It's really the recognition of where that number is five years from now. So I would say I don't think people should be building models and saying they can articulate and anchor a view on the price of anything. And actually, I would say that about a stock because you know what? people would have been stopped out of Palantir and Tesla a long time ago. And yet, Fundstrat's been on the right side of that trade because we don't get grounded by that. It takes a whole lot of PE to offset E. So how then do you estimate the size of this market, right? Do you comp it?

So, of course, you helped pioneer the 2017 Bitcoin is digital gold. There in the comp is what, you know, gold, which is 20 trillion or so in value. Do you do comp ether to something like gold or to a commodity, even like an oil, you know, calling ether a digital oil? Is that the way you sort of talk about the ceiling value for this asset? I think that that's part of it. I've seen some work done. I actually think eth is digital oil. Did a pretty nice job on their report. I'm sure you guys have seen it. I know that the Mosaic's team has helped with doing two models for Ethereum. one is basically a banking system proxy model and then another is payment proxy.

But you know, at the end of the day, if there's anything I've learned in the equity world, you can't be grounded by a rigid framework. And that is the mistake people make. And I think people have tried to pin me on the S&P like, Tom, you realize, remember when the S&P fell in April and we're at the tariff lows, I had everyone say, Tom, earnings are going to get cut.

So your S&P is going to get massacred. And by the way, you know, so every strategy is cut numbers for the year except us. And then they said, it won't recover because the Fed's not going to save you. So there's no Fed liquidity put. And I said it didn't matter because it's a waterfall decline.

And guess what? It didn't matter. We had a V-shaped recovery. That was not something that anyone built a spreadsheet for. But it really is an understanding of how markets work and the resilience. And so I would just say for the listener, I'm not against trying to build frameworks, but to me, ETH at $3,600, it's kind of ridiculously undervalued.

So maybe that's the most important takeaway in not trying to give someone a spreadsheet to build for five years and try to understand it. I know it sounds like I'm not giving an answer, but I think that's actually the best answer to give. Tom, do you think at some point these crypto treasury companies, Bitcoin, Eath, other asset treasury companies get a little overheated. And, you know, maybe this is the crypto PTSD talking, but many of us live through the GPDC, kind of like trade and the three O's capital blow up and how that infected the rest of markets. And looking at these treasury companies and all these new

entrants going on in this premium to MNAV. And some are even comparing it to kind of investment trust companies of the 1920s. And of course, we know how the 1920s stock. And of course, we know how the 1920s, stock market era ended. Do you think that there's a chance that this gets into bubble territory, that this gets overwrought, that the premiums become reflexive up, and then suddenly in a elevator down kind of lose all of this value and cause more systemic effects in crypto into the broader economy? Like, are you worried about this? Well, it's a lot to process there. One, going into the liquid equity world, this is the most hated V-shaped rally. You know, we still, most of our Zooms with our institutional clients is people telling us

why the stock market shouldn't be going up and why it's expensive. And every time we get off, it strengthens the case for stocks to go higher because it's a non-consensus view that we should be going up. that's, you need skepticism for markets to go up. If everybody was bullish in the liquid world, that's the top. Just because digital assets at treasuries have gone up and you don't own it doesn't mean it's a bubble. A bubble is just your friend making money. A bubble is truly created when everyone is bullish.

So if you're bullish, not you, but I'm saying the listener is bullish and then they don't go up and everyone's bullish. then that's a bubble. Now, the only way these crypto treasuries get into trouble is if they use leverage. So I would say anyone who's doing exotic instruments, debt structures, unless they're scarce, micro strategy can do a lot of things because they've changed the world.

And same thing with metaplanet, they've changed the world. But the ones that haven't, maybe they're the ones that get into problems, but from what I can see, most crypto treasuries are pretty plain vanilla. So what happens? They just go down in price. I don't think that that's actually could cause a stock market crash. The stock market crash is usually a debt problem, you know what I mean?

Or an exogenous shock. I'd say we're a long way from a bubble. I mean, if things were, if the cost of capital was low, you know, all these Bitcoin treasuries, some of them are trading it now. So it's hardly a bubble. In fact, the market's betting that it's oversupplied already. You know, so they only go up if Bitcoin goes out. But you're right.

At some point, something is a bubble, but I think that people always declare a bubble and everyone always rings the bell. You know, fourth inning to the ninth inning, everyone's ringing the bell at the top. You realize, like, you don't really have a top until no one's bearish. And right now, everyone's bearish. Everyone's bearish on Eith. Everyone's bearish on Bitcoin because of last week. And everyone's bearish on stocks because of last week.

I mean, it's, if you, if we were at a top last week's five consecutive bearish engulfing days, everyone should have said, oh, nothing, but you know, everybody says this is the top. When you have conviction that paper thin, you're nowhere near a top. Just keep that in mind. So what's your conviction with respect to macro here, Tom? Because that's the other thing that could throw these crypto markets off is if there's some sort of macro event, you know, tariff, you know, recession. I think last year we actually had you on. It was around August as well. We had this yen kind of carry trade that sort of evaporated into nothing. I think you're, you were bullish then. You said, this would all go away. And so it has. What's your outlook right now when it comes to macro?

Anything in the waters that concerns you? Or do you think we're in a good place? Yeah, I am. I'm very worried about how institutions are becoming politicized. I mean, the Fed is independent, should be and the BLS is a dependent and should be. They make a lot of, the BLS revisions are very peculiar, but I don't think it's the BLS being political. Look, the economy to me is very strong, but when I speak to clients, the institutional universe, they think we're in a recession.

Now, people on this podcast, you're going to hear them to be like, Tom, you're so off base. If everyone thinks we're in a recession, you're the one that's wrong because we can't, say this economy strong, but reality is, I don't think in my 30 years anyone's ever called a recession correctly. When everyone says we're in a recession, guess what? It's not a recession. Because a recession is a sudden change in business conditions that catches everyone off sides. That's how you get a recession. You get a housing bubble and it bursts. You can't get a burst when

everyone's cautious. ISM's been below 50 for 29 months. Corporate America is cautious. I I'm just going to say that would literally be the first recession in the history of the ISM where you didn't break above 50 and then you had a recession. So I think this is going to sound very strange. Everything I look at empirically were mid-cycle or even early cycle in the economy. And the tariff was the recession. Interest. Tariff was such a shock.

It reset confidence in the business sector. And that's how you prevent a recession. You get everyone so scared they don't spend money. So that's why, look, look at the data. Look at the corporate earnings. S.P. They've been great. No one's like seeing demand collapse.

It's because everyone's cautious. Tom, I'm just guessing that you've been inundated with just phone calls from people on Wall Street. Every billionaire in Wall Street is calling Tom Lee to ask about Ethereum and just to learn more about it. What is the biggest misunderstanding that Wall Street still has today about, either crypto broadly or Ethereum specifically. That's a great question. I'm glad you're asking David,

because Wall Street likes to build spreadsheets. And so every call starts with Tom, can you give me the model on how gas fees are going to change with stable coins? So give me your assumption on how much stable coin volume is, how much goes to E, how much will be layer two and how much gets paid? and I'd say that's the reason people,

when you get someone a spreadsheet, then you get an analysis paralysis because then suddenly you don't see the bigger picture that ETH is literally the legally compliant blockchain. And I think it's a big stumbling block for people. But it's the same with the S&P. Like imagine you ask someone, all right, you're Harvard MBA and you use CHAPT

and you're a genius all at once. analyze the stock market. And then the model's going to be like, well, S&P, median PE long term is 16 times and earnings. Margins are at all time high, so margins should go down. S&P should be 3,000.

I mean, literally, I'm sure every one of your guests tell you see that. And I'd say, maybe you should try to align whether their view has worked in the last 50 years. And you'd realize, like, that analysis literally never made you money.

Okay, my analysis on the people coming to you with a spreadsheet is that they're doing their basic CYA work. They're covering their own ass. They need to justify to their boss and to their boss's boss why they're about to buy a ton of ETH or buy a ton of, you know, BMNR. And so they need to do the spreadsheet

just to check that box. How can we all provide them a different CYA checkbox that does that job? Yeah, I mean, that's fair question. All right. So one thing is, you know, Fundstrat's evidence-based research, but we're not anchored by, ISM to us, is not rule of law. The jobless claim number is not rule of law.

Fed funds is not rule of law where the tenure is because they don't, they're not, these are not, never an equilibrium. And just as proof of evidence, Fundstrat launched an ETF last year called Granny Shots. It's only been eight months, but year-to-day, Granny Shots is up 17%. It's a large only buys SMP constituents. SMP is up 7%. So we outperformed the S&P by a thousand basis points. Morningstar ranks us as the top 30 out of 1,400 funds.

So we're in the, we're literally top two percentile of large cap equity funds here to date because we use an evidence-based approach. But it's not anchored by like, this is what earn you should be. But our stock selection is very disciplined. If someone asked me what an Ethereum treasury companies were, okay, and I'm not going to talk about BitMine specifically, you should start with their Ethereum held per share, okay, and then do the four things I just added.

Velocity, liquidity, and scarcity. You know, how unique is what they're doing? Like the largest one should get a premium, obviously, right, because there's a network effect. then you should just say, what is Ethereum? What's your upside downside? If someone is doing precision of eth to the penny or even 100, you know their analysis won't ever work,

because Ethereum's never in equilibrium. But you should say, if Ethereum's 3,700, what's your downside case? You know, should it be the low of this year? Okay, I'm 1700. But what's your upside case? A ratio of Bitcoin from five years ago, so that gets you to like 20,000. ETH. So now you have asymmetry on your risk reward and you know the ETH per share. So you do

future ETH per share plus velocity and liquidity and scarcity. And that's how you should get to your price. And that's not using a spreadsheet. That's really using what would happen in real life. Right. In real life, if ETH is at 20,000, what is these companies worth? But if it goes to 1,700, it gets cut in half. And the one, let's see, ETH goes, gets cut in half. but this company doubles your eath per share in the same period of time, the stock will be flat. So the one with the velocity is the best bet

because they're going to stack your eath. Tom, I believe you're rocking a pudgy penguin, an unofficial pudgy penguin profile picture on Twitter. Do you own any... Oh, is that a real one? Yeah. Luca and his crew made this for us, yes. Oh, great.

Do you own any other Ethereum NFTs or just what do you think about NFTs, generally speaking? Well, I have a lot of Pudgy Penguin merch. I think I heard that last week. It's cool stuff. Yeah. But it's really hard to keep in my office because everybody here wants a piece of it.

So Pudgy Penguins are your favorite Ethereum NFT? Well, you know, what really strikes me about Pudgy Penguins as really unique is it's actually quite popular in Curia. And Curia is also a big equinext. culture, you know, it's one of the most heavily traded stock markets in the world. And, you know, I spend a lot of time in Korea. And of course, it's a big crypto culture. So to me, Pudgy Penguins, I think it's extra validation because it's so popular in Curio. Tom Lee, this has been exceptional. Thank you so much for joining us. I got to say, I did not anticipate you being so fully into the Ethereum fold, but very glad to have you and excited to have you aboard as you're kind of

evangelizing and really sharing what ETH can do for the world, particularly to Wall Street. So excited to see BitMine continue to acquire more ETH into the future up towards 5%. So let's go. Yeah, look forward to it. Got to let you know, bankless nation, of course, none of this has been financial advice. Crypto is risky. You could lose what you put in. But we are headed west. This is the frontier. It's not for everyone, but we're glad you're with us on the bankless journey. Thanks a lot.