With main cryptocurrencies dropping in costs, long-time gold advocate Peter Schiff and crypto investor Andrew Kang have seized the second to argue that current declines vindicate their warnings concerning the valuations and misplaced optimism surrounding Bitcoin and Ethereum respectively.
The current market backdrop has given voice to skeptics. Ethereum has slipped beneath $4,000, and Bitcoin has shed a few of its current positive aspects. This has induced the full cryptocurrency market capitalization to fall by greater than 6.6%.
Analysts proceed to disagree on whether or not this marks the beginning of an extended downturn or if it’s only a “bear lure” inside a seamless cycle.
Schiff reignites long-standing skepticism
Schiff, chief economist and strategist at Euro Pacific Capital, has for years dismissed Bitcoin as “digital idiot’s gold.” He renewed his critique this week by highlighting the decline in Michael Saylor’s Technique (previously Microstrategy with the ticker $MSTR).
“Few have seen that $MSTR is down 45% from its Nov. 2024 excessive. That is going to be a brutal bear marketplace for Bitcoin treasury corporations. I’m unsure if any, together with MSTR, will survive it,” he posted on X.
He just lately identified that Bitcoin was down about 20% towards gold, calling it proof of a bear market.
Crypto bulls beneath assault
Kang’s posts got here on account of Tom Lee’s current feedback on Ethereum. Tom Lee, co-founder of Fundstrat and chairman of BitMine, at a current occasion, stated that Ethereum might as excessive as as much as $12,000–$15,000 by the top of 2025, pushed by adoption on Wall Road and help from a crypto-friendly Trump administration.
As reported by Cryptopolitan, Lee described Ethereum as a “impartial chain” able to attracting each banks and regulators, and argued that its function in tokenized property, stablecoins and even synthetic intelligence would usher in a decade-long “tremendous cycle.”
Lee’s firm, BitMine, has restructured its steadiness sheet round Ethereum and now holds 2.15 million ETH, the most important treasury on this planet. The wager has lifted its market capitalization from $37.6 million in June to $9.45 billion by September.
His claims noticed individuals on the bullish and bearish sides of the Ethereum aisle chip in with their opinions. Kang, the co-founder of Mechanism Capital, was one of many loudest voices as he launched a detailed rebuttal on X, dismissing Lee’s thesis as “one of the crucial financially illiterate arguments” he had seen from a high-profile analyst.
Andrew Kang launches counteroffensive
Kang claims that Ethereum’s fundamentals don’t help such lofty valuations. Whereas tokenization of real-world property and stablecoin volumes have risen “100 to 1,000-fold” since 2020, he famous that community price income has not scaled accordingly.
In accordance with him, environment friendly upgrades, the migration of exercise to rival chains corresponding to Solana and Arbitrum, and the low turnover of tokenized bonds and securities have restricted price development. “You would tokenize a trillion {dollars}’ value of property, but when that’s not shifting round a lot, then it perhaps would solely add $100k value of worth to ETH,” Kang wrote.
He additionally rejected Lee’s declare that establishments would accumulate ETH to safe the community, stating that no main banks have but bought or staked the asset.
Technically, Kang prompt Ethereum is extra more likely to stay trapped in a variety between $1,000 and $4,800 than to interrupt out to new highs.
In a later publish, he went additional, branding Ethereum “Luna 2.0” — a reference to the Terra blockchain whose collapse in 2022 worn out billions in investor capital. He has additionally reportedly put his cash the place his mouth is, inserting put choices to wager on additional declines for Ethereum.
Nonetheless, it’s value noting that Kang is kind of bullish on Bitcoin and has lengthy been bearish on Ethereum. A few of his predictions about ETH’s impending doom have failed previously, too.
