This Formerly High-Flying Cryptocurrency Has the Potential to Become the New Bitcoin, According to Tom Lee of Fundstrat
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The Bitcoin treasury company model pioneered by Strategy is going fully main. In fact, Wall Street is now adapting this model for other cryptocurrencies beyond just Bitcoin. On June 30, Tom Lee...
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cryptocurrency
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July 8, 2025
07:30 AM
The Motley Fool
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The Bitcoin treasury company model pioneered by Strategy is going fully main
In fact, Wall Street is now adapting this model for other cryptocurrencies beyond just Bitcoin
On June 30, Tom Lee of Fundstrat announced that he was becoming the chairman of BitMine Immersion nologies, a tiny Bitcoin mining company
But here's the twist: He's going to transform that Bitcoin-centric company into an Ethereum (ETH 1. 32%) treasury company
The company will buy Ethereum, not Bitcoin, for its balance sheet
Tom Lee is very bullish on Ethereum
He recently told CNBC that he thinks Ethereum has the potential to become "the new Bitcoin. " Is he right
Ethereum's historical track record To answer that question, all you need to know is that Ethereum has a stellar track record, and has often been highlighted as the one cryptocurrency capable of "flipping" Bitcoin
That is, Ethereum is the one cryptocurrency in the world capable of surpassing Bitcoin in market cap
That's due in part to the remarkable historical returns of Ethereum
When it launched in July 2015, Ethereum traded for less than $1
Ten years later, it trades for $2,595
That's a head-spinning return on investment within a relatively short period
Admittedly, Ethereum has been struggling of late, down 22% for the year
And it doesn't show signs of turning around anytime soon, even with the support of the Trump administration, which made Ethereum one of the keystone cryptocurrencies for its new U
Digital Asset Stockpile
The convergence of Wall Street and crypto Tom Lee is not focused on the past, he's focused on the future
And what he sees happening is a grand convergence of traditional financial services and crypto
Historically, Ethereum has been the one blockchain that dominates the world of decentralized finance (DeFi), which is the blockchain version of traditional finance
For example, Ethereum has a staggering 55% market of total value locked (TVL), a key metric for measuring DeFi activity
No other blockchain even comes close
Solana only has a 7% market
And Base, the blockchain launched by Coinbase Global, only has a 3% market
Image source: Getty Images
When you look at the investments being made by World Liberty Financial, the crypto venture affiliated with the Trump family, they all seem to involve Ethereum or DeFi
Given that Ethereum is such a DeFi powerhouse, this makes sense
This is important to point out because just everyone admits that Bitcoin will never be a DeFi powerhouse
Right now, Bitcoin only has a 5. 5% market of TVL
So Ethereum is apximately 10x bigger than Bitcoin when you take into account only this one factor
Stablecoins change everything I've d the best for last: Ethereum is also a giant when it comes to stablecoins
These stablecoins are cryptocurrencies that are pegged 1:1 to the value of another asset, usually the U
These stablecoins are -- you guessed it -- extraordinarily important to decentralized finance
They are the easiest way for main Wall Street institutions to gain access to blockchain-based yield strategies
Moreover, stablecoins are becoming some of the biggest buyers of U
T-bills, since this government debt can be used to preserve the dollar peg
As a result, Treasury Secretary Scott Bessent recently predicted that stablecoins will become a $2 trillion industry within a few years
As Tom Lee points out, roughly 50% of all stablecoin transaction activity is now taking place on the Ethereum blockchain, and roughly 30% of all transaction volume on the Ethereum blockchain is linked to stablecoins
So he sees these stablecoins driving tremendous value for Ethereum in the future
Caveats for investors All of this sounds fantastic, right
Investors get a cryptocurrency with a stellar track record
This cryptocurrency is also at the forefront of the fastest-growing sector of the crypto market
And this cryptocurrency has the direct attention of the Trump administration
What could possibly go wrong
For one thing, Ethereum faces a tremendous amount of competition from other blockchains, many of which are also trying to become "the blockchain" for stablecoins
Tron, a competing blockchain with support from the Trump family, is second only to Ethereum for stablecoin transaction activity
Also, keep in mind: Vitalik Buterin, the legendary founder of Ethereum, warned earlier this year that he doesn't want the Ethereum blockchain to become a Wall Street casino
Even though the White House has made every signal that it wants to include Ethereum in its vision of crypto, there's been little recical show of support from Buterin
Before you jump right in and assume that Ethereum will become "the new Bitcoin," make sure you do your due diligence
Right now, Ethereum seems to be the frontrunner for this title, but there are plenty of other competitors out there in the crypto market
Dominic Basulto has positions in Bitcoin, Ethereum, and Solana
The Motley Fool has positions in and recommends Bitcoin, Ethereum, and Solana
The Motley Fool recommends Coinbase Global
The Motley Fool has a disclosure policy.
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