BitMEX chairman Tom Lee believes Ethereum could eventually overtake Bitcoin’s market share, drawing a parallel to how U.S. equities surpassed gold after the country abandoned the gold standard 54 years ago.
“Ethereum could flip Bitcoin in the same way Wall Street and equities flipped gold post-’71,” Lee said during an interview with ARK Invest CEO Cathie Wood on Thursday.
Currently, Bitcoin’s market capitalization is about 4.6 times larger than Ethereum’s, standing at roughly $2.17 trillion versus $476.33 billion, according to CoinMarketCap.
Lee cites the “Nixon Shock” to bolster Ethereum’s potential. Overseeing BitMine’s Ethereum accumulation strategy, he noted that Ethereum could see similar growth to the U.S. dollar after 1971, when President Richard Nixon made the dollar “fully synthetic,” detaching it from gold backing.
Lee explained that when the U.S. moved off the gold standard, “The immediate beneficiary was demand for, and a market to own, gold.”
However, Wall Street responded by creating financial products that solidified the dollar’s dominance. “Today, the market cap of equities stands at $40 trillion compared to $2 trillion for gold,” he said.
“Dollar dominance grew from 27% of GDP to 57% of central bank reserves and 80% of financial transactions,” Lee added, noting that a similar dynamic could unfold for Ethereum. “Dollar dominance will be the opportunity for Ethereum, driven by everything becoming… tokenized.”
The concept of the “flippening”—Ethereum surpassing Bitcoin in market capitalization—has been debated for years. “As we move dollars onto the blockchain through stablecoins, we’ll eventually tokenize stocks, real estate, and more,” Lee said. He emphasized, however, that this is still a “working theory,” and he remains bullish on Bitcoin.
Interest in Ethereum overtaking Bitcoin has recently surged. In August, ConsenSys founder Joseph Lubin predicted Ethereum could “surge 100x and flip Bitcoin as a monetary base.” Around the same time, Bitcoin advocate and Jan3 founder Samson Mow argued that Ethereum investors would likely return to Bitcoin once ETH prices rise sufficiently.
The debate isn’t new. In August 2021, DeVere Group CEO Nigel Green said, “Ethereum’s ascent to the top of the cryptoverse seems unstoppable.” Green added, “Ethereum is already years ahead of Bitcoin in everything but price and fame.”
