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Ethereum Will Flip Bitcoin, Predicts Tom Lee: Here’s Why And When

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Tom Lee says Ethereum can overtake Bitcoin—“flip” it—by enjoying for dollar-dominance in a world of tokenized property, whilst he stays emphatically bullish on Bitcoin’s financial position and long-term worth.

In a podcast trade with Cathie Wood, Lee framed the approaching competitors by way of a 1971-style lens, arguing that the top of the gold normal catalyzed a wave of monetary engineering that in the end made dollar-based equities far bigger than gold; in his telling, the broad tokenization of cash and property will rhyme with that historical past, positioning Ethereum’s smart-contract rails to seize the lion’s share of exercise.

Will Ethereum Flip Bitcoin?

Wood set the premise with ARK’s top-down view of crypto’s addressable market by decade’s finish. “You know, the ecosystem we count on to hit $25 trillion in 2030, the overwhelming majority of that in Bitcoin,” she mentioned, citing Bitcoin’s position as “a world financial system, you realize, guidelines based mostly that we’ve been lacking because the US went off the gold trade normal in 1971.” She requested Lee immediately: “I’d love to listen to your ideas on why ETH or the ecosystem will surpass Bitcoin.”

Lee’s reply was to rewind to that very same inflection level. “1971 was when Nixon formally withdrew the US from the gold standard. The rapid beneficiary was there was demand and a market to personal gold,” he mentioned.

But in his telling, the extra consequential growth was how finance rebuilt itself round an unpegged greenback. “In 1971, the greenback turned totally artificial as a result of it was not backed by something. And so there was a threat that the world would go off the greenback normal. So Wall Street stepped in create merchandise to propagate the way forward for Wall Street, together with…cash market funds…credit score…mortgage backed securities…futures, et cetera.” He continued, “Dollar dominance by the top of that interval…went from 27 p.c of GDP phrases…to 57 p.c of central financial institution reserves and 80 p.c of monetary transaction quotes.”

For Lee, the market-structure consequence was stark: “The market cap of equities at the moment is 40 trillion in comparison with two trillion for gold. So in different phrases, gold is 5 p.c of all accessible property.” He then drew the crypto corollary. “In 2025, we expect every little thing is now changing into artificial as we tokenize…as we transfer not simply {dollars} onto the blockchain, simply stablecoins, however we’ll transfer shares and actual property. Dollar dominance goes to be the chance of Ethereum. So digital gold is Bitcoin. And so in that world, we imagine Ethereum may flip Bitcoin, just like how Wall Street and equities flipped gold publish ’71.”

Crucially, Lee couched the flippening as a sectoral dynamic relatively than a zero-sum guess. “That is simply our working concept as a result of I’m nonetheless a Bitcoin bull,” he mentioned. “I’m very bullish on Bitcoin and I imagine [Ark Invest’s] targets for Bitcoin are literally reachable. So we expect Bitcoin’s honest worth ought to no less than be $1.5 to $2.1 million, however we will see increased values.”

In his framework, Bitcoin anchors the “digital gold” financial premium, whereas Ethereum’s impartial smart-contract platform turns into the venue “the place plenty of Wall Street will innovate” by way of real-world-asset issuance and collateral flows. “That would, after all, present upside to a impartial good contract platform the place plenty of Wall Street will innovate actual world property,” he concluded.

At press time, ETH traded at $3,750.

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