Mechanism Capital’s Andrew Kang Slams Tom Lee’s ETH Thesis as “Financially Illiterate”
Andrew Kang, founding father of crypto enterprise agency Mechanism Capital, didn’t maintain again in his newest critique of BitMine’s Tom Lee’s newest Ethereum thesis.
In a pointy publish on X, Kang known as it “probably the most r*tarded combos of financially illiterate arguments I’ve seen from a well-known analyst shortly.”
Lee’s thesis leans closely on stablecoin and real-world asset (RWA) adoption as a driver of Ethereum worth. Kang argues that is deeply flawed: “Since 2020, tokenized asset worth and stablecoin transaction volumes have elevated 100–1000x… however charges are virtually on the identical stage as 2020.”
He factors to 3 key causes: Ethereum’s upgrades have made transactions extra environment friendly, a lot of the exercise has migrated to different chains like Solana and Arbitrum, and tokenizing low-velocity property doesn’t translate into significant charges.
“You may tokenize a trillion {dollars} price of property but when that’s not transferring round a lot then it possibly would solely add $100k price of worth to ETH,” Kang notes..
Digital Oil: A Weak Analogy
Lee additionally compares Ethereum to “digital oil,” a metaphor Kang dismisses as misguided. “Oil is a commodity. Real oil costs adjusted for inflation have been buying and selling in the identical vary for over a century with periodic spikes that revert,” he writes.
If ETH is to be considered in commodity phrases, Kang believes that’s not inherently bullish. “Not positive what Tom’s making an attempt to do right here,” he added.
Institutional Adoption Still Missing
Another plank of Lee’s thesis is that giant establishments will purchase and stake ETH to safe networks the place their property are tokenized. Kang was blunt in rebuttal: “Have massive banks and different monetary establishments purchased ETH on their steadiness sheet but? No. Have any of them introduced plans to? Also no.”
He likens the thought to banks hoarding barrels of gasoline just because they eat vitality. “They simply pay for it when they should. Do banks purchase shares of asset custodians they use? No.”
For Kang, the analogy highlights how unrealistic it’s to count on establishments to carry ETH in important quantities for operational causes.
Overvaluation and Technical Analysis
Kang additionally criticizes Lee’s declare that ETH could be worth as much as all monetary infrastructure corporations mixed, calling it “a elementary misunderstanding of worth accrual and simply pure delusion.” While he acknowledges that technical evaluation could be helpful, he accuses Lee of misusing it to strengthen bias.
Ultimately, Kang argues Ethereum’s present valuation is propped up by “monetary illiteracy,” evaluating it to XRP’s inflated market cap. “Broader macro liquidity has saved ETH market cap afloat, however until there’s main organizational change it’s possible destined to indefinite underperformance.”
Kang Takes $200M Long Position on Bitcoin
Kang has reportedly doubled his bullish wager on Bitcoin, taking a $200 million lengthy place, based on on-chain knowledge analyzed by crypto analytics platform Arkham.
In an April 12 post on X, Arkham reveals {that a} pockets tied to Kang made a second $100 million leveraged lengthy wager on Bitcoin, bringing his complete place to $200 million.
The latest commerce carries an estimated potential achieve or lack of round $6.8 million, reflecting Kang’s confidence in a near-term Bitcoin rally.
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