Perma Bull and Wall Street Strategist Tom Lee Is Betting $250 Million On This Cryptocurrency (Hint: Not Bitcoin)

The stock has rocketed since then, and eventually, Saylor and Strategy gained enough credibility to tap the capital for funding that it could then use to buy Bitcoin

This essentially made Strategy a leveraged play on Bitcoin

The company also announced a $250 million private placement, which it will use to purchase Ethereum (ETH 5. 09%), the world's second-largest cryptocurrency by market value

Is it Ethereum's time

Since Donald Trump won the presidential election last November, several of the largest cryptocurrencies, including Bitcoin and XRP, have done quite well

Ethereum, not so much

Bitcoin Price data by YCharts It's hard to pinpoint exactly why Ethereum has not d in the gains, but perhaps a better explanation is that Bitcoin and XRP have simply enjoyed more catalysts

Bitcoin has benefited from being viewed as a form of digital gold, while XRP has surged as the Securities and Exchange Commission (SEC) its long-standing lawsuit against Ripple, the company behind XRP, and due to the possible launch of spot-XRP exchange-traded funds (ETFs)

Image source: Getty Images

The underperformance has opened the door for investors who feel Ethereum is being unjustly left behind, Lee being one of them

Not only has Lee become a well-known contributor on CNBC, but he's made some prescient calls in recent years on the price of the broader market, as well as Bitcoin

Lee has previously said he thinks the broader benchmark S&P 500 could hit 15,000 by 2030 (the index now trades at 6,200)

He's also quite bullish on Ethereum as the crypto and financial sectors become more integrated, as he recently said on CNBC: The financial services industry and crypto are converging and it really started with stablecoins, which is the ChatGPT of crypto because it's viral adoption by consumers, banks and now even Visa

Underneath the stablecoin industry is Ethereum -- that is really the backbone and architecture of stablecoins so it's important to create a ject that accumulates Ethereum to essentially tect and have some influence on the network

As a reminder, stablecoins are digital assets pegged to a currency or commodity

They are int to take advantage of the nology behind the blockchain while leaving behind the volatility associated with cryptocurrencies

Many believe they could be extremely helpful for those without access to the banking system because you can use them to transfer money anywhere with internet access

Lee thinks banks could use Ethereum's of-of-stake (PoS) consensus mechanism to secure stablecoin issuances in the future

PoS involves selecting validators based on the number of Ether tokens users have to confirm transactions and mint new blocks

In a way, Ethereum is already a core part of the plumbing of the burgeoning stablecoin network

That's because it's one of the most commonly used blockchain networks in the U

Is Ethereum to go on a Bitcoin- run

Part of Lee and Bitmine's bet on Ethereum has to do with the stablecoin market

Treasury Secretary Scott Bessent has already said he thinks stablecoins could go from a $250 billion market today to $2 trillion

If that happens, Lee thinks Ethereum's network is ly to benefit immensely because of all the network fees, which will perhaps make Ethereum more ubiquitous

Remember, cryptocurrencies are difficult to value because they don't generate earnings a company

I've been surprised that Ethereum's price has stayed so muted while Bitcoin has soared

As a cryptocurrency, Ethereum certainly has one of the best use cases due to all of the activity on its network from decentralized applications and its of-of-staking concept, so I think it could be due for a run at some point

Bram Berkowitz has positions in Bitcoin and Ethereum

The Motley Fool has positions in and recommends Bitcoin and Ethereum

The Motley Fool has a disclosure policy.