Andrew Kang, founder of crypto venture firm Mechanism Capital, did not hold back in his latest critique of BitMine’s Tom Lee’s latest Ethereum thesis.
In a sharp post on X, Kang called it “one of the most r*tarded combinations of financially illiterate arguments I’ve seen from a well known analyst in a while.”
Lee’s thesis leans heavily on stablecoin and real-world asset (RWA) adoption as a driver of Ethereum value. Kang argues this is deeply flawed: “Since 2020, tokenized asset value and stablecoin transaction volumes have increased 100–1000x… but fees are practically at the same level as 2020.”
He points to three key reasons: Ethereum’s upgrades have made transactions more efficient, much of the activity has migrated to other chains like Solana and Arbitrum, and tokenizing low-velocity assets doesn’t translate into meaningful fees.
“You could tokenize a trillion dollars worth of assets but if that’s not moving around much then it maybe would only add $100k worth of value to ETH,” Kang notes..
Digital Oil: A Weak Analogy
Lee also compares Ethereum to “digital oil,” a metaphor Kang dismisses as misguided. “Oil is a commodity. Real oil prices adjusted for inflation have been trading in the same range for over a century with periodic spikes that revert,” he writes.
If ETH is to be viewed in commodity terms, Kang believes that is not inherently bullish. “Not sure what Tom’s trying to do here,” he added.
Institutional Adoption Still Missing
Another plank of Lee’s thesis is that large institutions will buy and stake ETH to secure networks where their assets are tokenized. Kang was blunt in rebuttal: “Have large banks and other financial institutions bought ETH on their balance sheet yet? No. Have any of them announced plans to? Also no.”
He likens the idea to banks hoarding barrels of gasoline simply because they consume energy. “They just pay for it when they need to. Do banks buy stocks of asset custodians they use? No.”
For Kang, the analogy highlights how unrealistic it is to expect institutions to hold ETH in significant amounts for operational reasons.
Overvaluation and Technical Analysis
Kang also criticizes Lee’s claim that ETH could be worth as much as all financial infrastructure companies combined, calling it “a fundamental misunderstanding of value accrual and just pure delusion.” While he acknowledges that technical analysis can be useful, he accuses Lee of misusing it to reinforce bias.
Ultimately, Kang argues Ethereum’s current valuation is propped up by “financial illiteracy,” comparing it to XRP’s inflated market cap. “Broader macro liquidity has kept ETH market cap afloat, but unless there is major organizational change it is likely destined to indefinite underperformance.”
Kang Takes $200M Long Position on Bitcoin
Kang has reportedly doubled his bullish bet on Bitcoin, taking a $200 million long position, according to on-chain data analyzed by crypto analytics platform Arkham.
In an April 12 post on X, Arkham reveals that a wallet tied to Kang made a second $100 million leveraged long bet on Bitcoin, bringing his total position to $200 million.
The recent trade carries an estimated potential gain or loss of around $6.8 million, reflecting Kang’s confidence in a near-term Bitcoin rally.
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