Ethereum Could Eventually Surpass Bitcoin’s Market Share, Says BitMEX Chair Tom Lee
Ethereum has the potential to surpass Bitcoin’s market share in a manner similar to how US equities overtook gold 54 years ago, following the US abandonment of the gold standard, according to BitMEX chair Tom Lee.
“Ethereum could flip Bitcoin similar to how Wall Street and equities flipped gold post ’71,” Lee said in an interview with ARK Invest CEO Cathie Wood on Thursday.
### Market Capitalization Comparison
Currently, Bitcoin’s (BTC) market capitalization is about 4.6 times larger than Ethereum’s, standing at roughly $2.17 trillion compared to $476.33 billion, according to CoinMarketCap.
### The Nixon Shock and Its Implications
Lee referenced the historic “Nixon Shock” to support the argument for Ethereum’s potential rise. He, who oversees BitMine’s Ethereum accumulation strategy, explained that Ethereum could rise similarly to how the US dollar rose to dominance after 1971. This shift occurred when US President Richard Nixon made the US dollar “fully synthetic,” no longer backed by gold, creating fears that the dollar standard might be abandoned.
Lee noted, “The immediate beneficiary was demand and a market to own gold.” However, in response, “Wall Street created products that made the dollar dominant, and the market cap of equities today is $40 trillion compared to $2 trillion for gold.”
He further added, “Dollar dominance by the end of that period went from 27% in GDP terms but to 57% of central bank reserves, and 80% of financial transactions, quotes.”
According to Lee, “Dollar dominance is going to be the opportunity of Ethereum,” driven by “everything becoming tokenized.”
### The Path to Tokenization and “The Flippening”
Lee envisions a future where dollars move onto the blockchain through stablecoins, followed by stocks and real estate. However, he emphasized that this is still a “working theory” and reaffirmed that he remains a Bitcoin bull.
The so-called “flippening” — the idea that Ethereum will one day surpass Bitcoin’s market capitalization — has been a topic of debate for years but has gained renewed attention recently.
### Industry Perspectives on Ethereum’s Ascent
In August, ConsenSys founder Joseph Lubin predicted that Ethereum will “surge by 100 times and flip Bitcoin as a monetary base.”
Conversely, Bitcoin advocate and Jan3 founder Samson Mow stated around the same time that Ethereum investors would eventually switch back to Bitcoin once ETH prices rise enough.
In August 2021, DeVere Group CEO Nigel Green remarked, “Ethereum’s ascent to the top of the cryptoverse seems unstoppable,” adding, “Ethereum is already years ahead of Bitcoin in everything but price and fame.”
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As the crypto landscape evolves, the debate over Ethereum’s potential to overtake Bitcoin remains a hotly discussed topic among investors and industry leaders alike.
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