Tom Lee yesterday dedicated a six-post thread on X to a single proposition. If a company deals with how Ethereum (ETH) handles micro-strategy, the token price should reach around $30,000, just following the mathematics of balance sheet absorption. Lee’s argument is based on a mechanic who praises the epic fairness of MicroStrategy that he really driven. From August 11, 2020 until today, the software company’s shares earned 35 times from $13 to about $455. Of the 11 of these 35 turns, it comes from Bitcoin’s own rise ($11,000 to $118,000 over the same period) 25 turns were created by “financial strategy.”
Ethereum from $30,000?
Lee lists the three moves that made the template work, and in his view it becomes even more powerful for ETH. Earn more tokens for new stocks that exceed the net asset value, misuse the volatility of the token to lower borrowing costs, and rely on convertibles or preferred stocks. As the realized volatility of the ether is still above Bitcoin, Lee argues that the costs of the debt and options structure used to leverage the Treasury can be static and accelerated token accumulation.
In the same thread, he reposted a chart showing that his vehicle, Bitmine Immersion Technologies, purchased four times the outlined value in the first week of activity ($1 billion in ETH) than MicroStrategy, which he purchased in the first week of his Bitcoin purchase in 2020.
The bitmine numbers indicate the scale. A July 17 regulatory submission and follow-up press release confirmed that the company currently owns 300,657 ETH (over $1 billion at the time of publication). Lee, who chairs Bitmine’s board of directors, said the company is “in the middle of dyeing it with 5% of its total ETH supply.”
The second largest treasurer is Sharplink Gaming, chaired by Ethereum co-founder Josefulvin. On July 17, the company updated its SEC prospectus, saying it would increase the number of shares it could sell from $1 billion to $6 billion, and its revenue would fund additional ETH purchases. Sharplink has already raised $413 million between July 7th and 11th, and as of July 13th, it has disclosed 280,706 ETH in its book.
BitDigital concludes the trio. After a $172 million underwriting stock sales and a liquidation of 280 Bitcoin on July 7, the miner registered with the NASDAQ reported the Treasury of 100,603 ETH, declaring its intention to “become a world-renowned ETH holding company.”
Taken together, the three companies currently manage around 682,000 ETH, or about half of the circulating supply, each with aggressive permission to explicitly issue more equity or debt for the accumulation of ether. Lee insists on the reflective loop that this creates (provides a higher share price that offers more stable capital to buy more tokens per share).
In response to Lee’s thread, Crypto analyst Dcinvestor distilled mathematics into range.
Ether is changing hands to nearly $3,600 today. The eight-fold move to $30,000 simply replicates the multiples Bitcoin recorded between MicroStrategy’s first financial purchase and its 2021 peak. The difference claims that MicroStrategy spent four years proofing the model. Ethereum’s finances take less than two months to raise the first hundreds of millions of dollars.
Featured images created with dall.e, charts on tradingview.com
