BlockBeats News, September 24th, Mechanism Capital partner Andrew Kang made a post on social media bluntly stating that Tom Lee, a prominent figure in the Ethereum bull camp in this cycle, had a very “idiotic” bull case for ETH, which was the most severe case of financial illiteracy rhetoric he had seen recently. Andrew Kang refuted several of his bullish arguments for ETH one by one:
· Stablecoin and RWA Adoption Argument: Kang believes that the Ethereum network upgrade has improved transaction efficiency, stablecoins and tokenization activities are also flowing to other blockchains, and the transaction fees generated by the tokenization of illiquid assets are minimal (a $100 million bond trading once every two years incurs only about $0.1 in fees).
· Digital Oil Analogy Fallacy: Kang believes that oil is a commodity, and the real oil price adjusted for inflation has remained within the same range over the past century. Viewing ETH as a commodity is not a bullish reason.
· Institutional Staking Capital Argument: Kang believes that large banks have not included ETH on their balance sheets, nor have they disclosed related plans. Banks will not hoard gasoline due to ongoing energy demands; they can purchase on-demand when demand is minimal. Banks also will not invest in the asset custodians they use.
· ETH Equivalent to Financial Infrastructure Enterprise Value Argument: Kang believes this is a complete misunderstanding and delusion of the value accrual mechanism.
· Technical Analysis: Kang believes that objectively, Ethereum has been in a multi-year consolidation range, and after recently touching the top of the range, it failed to break through resistance, indicating a bearish technical outlook. Although the long-term ETH/BTC chart is in a consolidation range, it has mainly shown a downtrend in recent years, and the fundamentals do not support valuation growth. Ethereum’s valuation mainly stems from a lack of financial knowledge—similar to XRP, but this valuation is not infinite. While macro liquidity supports ETH’s market cap, it will continue to underperform without significant changes.
