Tom Lee joins BitMine as chairman and launches $250M private placement to make Ethereum its primary treasury reserve asset

that's becoming really popular. We saw Brex embedded bill is embedded embedded go to market is is really a way to solve for really like efficient go to markets and I think this is a new one for for zero that is a great play. That's really helpful. Thank you for that context. Uh, I appreciate it.

I always like when breakdown of their stuff and congratulations. Yeah, congratulations. Thanks. We'll talk to you soon. Have a good one. Bye. Cheers, Sean. Up next, we have Tom Lee from BitMine, the first uh new uh treasury uh crypto treasury company. This time on the New York Stock Exchange, not the NASDAQ.

Uh we're going to talk to him about crypto. Really, really iconic stock exchange, if you ask me. It's the New York of stock exchanges in many ways. Totally. The city that never sleeps, the big apple. Totally. Totally. If it was a stock exchange, it would be the New York stock exchange. Um, very excited to talk to him.

Yeah. So, today they announced a 250 million private placement to implement buying Ethereum for their ETH treasury. Yes. The stock ETH has been one of these was up 48% in the pre-market. Yes. Uh, so welcome to the stream. how you doing? Good. Good to meet you.

Uh would you mind kicking us off with an introduction on yourself and the company and some of the news today? Uh glad to. Uh my name is Tom Lee. I'm the uh founder of Funstrat, which is a research firm and many of those might know me from that role where I'm I periodically appear on CNBC and talk about markets. Mhm.

I'm also the chief investment officer of Funstrat Capital, which is the asset manager, and we have an ETF called Granny Shots. That's um 1. 4 billion of assets now. And Funstrat as a research firm has 300 hedge fund clients and 10,000 RAAS.

and Arth uh and today uh it was announced that I'm uh taking a role separately from Funstrret as chairman of Bitmine Immersion Technologies and the ticker is BMNR and that's to help the company transform its existing treasury strategy to be one that is focused on Ethereum. What was the decision to go with Ethereum?

We've seen a lot of Bitcoin treasury stories happening over the past year, I would say. I mean, even going back further with Micro Strategy, but uh Ethereum is one that we just would highlight that the that Bitine uh is up 679% today. So, uh the market is excited about what you're doing.

But back back to John's question. Um well to me one of the things that caught my eye is that stable coins uh are the chat GPT of fintech right now because it's seen rapid adoption by consumers merchants and banks and now Visa uh and credit card providers.

It's because it really does have a a log function benefit over traditional dollars or over, you know, the credit card system. And uh it's $250 billion today. Treasury Secretary Bessant estimated or said it's reasonable it could go to two trillion.

That's a 10x market, you know, addressable market change, which means it's an exponential opportunity. Stable coins have to transact on a layer 1 blockchain and the the blockchain that is considered the biggest and the most secure and the most commonly used for stable coins is Ethereum.

So we saw an opportunity to say listen, let's think about more tokenization uh you know that chat GG stable coins is the chat GBT but it's opening doors to other ways to tokenize assets and so uh we thought it would make sense to do some a treasury strategy around Ethereum and it it plays a role that the bigger we become the more important we are to the Ethereum ecosystem.

So, I think we're actually playing a role in stabilizing Ethereum because we essentially act as a staking entity. And if we sort of think forward a few years, sorry if I'm rambling. Um, it's interesting.

Goldman and JP Morgan as they get into the stable coin business and Walmart and Amazon, they're going to realize that they need to really secure the layer one that they're operating on. So, they want it to be a big blockchain, a lot of validators. Um, Ethereum is the biggest.

And then the opportunity is that we're kind of like the plumbing of what banks will look like in the future because they'll be staking Ethereum on their balance sheet or crypto in order to fund and operate their stable coin.

Can you talk about the differences between the New York Stock Exchange and the NASDAQ and what it means to be uh listed on one or the other? Uh yes. Um, if you look at our press release, what we announced and we put prominently in the headlines was New York Stock Exchange listed. Mhm.

And uh, and we listed all of our partners. The reason for that is that most people know me as a traditional Finance World person that also is trafficking in crypto. We've written about Bitcoin uh, for eight years. We first recommended it when I was under a thousand to our clients, but it's been a slow road.

This project, the Bitmine immersions treasury strategy is really a convergence between traditional finance and crypto, right? That's where stable coins are intersecting.

And the partners we brought on, you know, Founders Fund, Panta, Kraken, um, Falcon X, Galaxy Digital, uh, are companies that are really straddling the the crossover world and we want it to be on a prestigious exchange.

Most of these Treasury strategies are trading on the NASDAQ CM, which is like a a a sort of the Junior League of NASDAQ.

We want it to be on something prestigious because we want our traditional clients to come in and say, "Look, Tom, if we're going to be um interested in this treasury and learning about why this is might be a new bank model, uh we don't want to be buying stocks that are on a bulletin board.

" So it was really important to be on a prestigious exchange like the New York Stock Exchange. So I think that that's a real you know one of the advantages of uh Bitmine immersion is that they invested the time to be uplisted and so that they are on the New York Stock Exchange.

H what uh uh is is is liquidity like different on the stock exchange versus like I mean as as someone who's like younger and and more I guess internet native like the idea of needing to buy a stock on a stock exchange is a little bit foreign compared to just like self-custoding crypto directly uh and then you have access to buy the major cryptocurrencies on pretty much any app in the app these days like it it feels very accessible and yet um and yet in the in in the past we've seen uh the ETF as a catalyst for price movements in the major L1's.

So uh talk to me about like what's actually going on in the market and and some of and characterize some of the different buyers and market participants and why they choose one way to get exposure over another. Yes. Um Yeah. And and so let's say I I'll take it in two parts.

You know, the first is um like in terms of a product to buy a New York Stock Exchange listed stock, which is what BMNR is, has market makers. Um it's almost like you have like this invisible hand protecting price and the exchange will halt the stock.

uh if it's if it feels one-sided, that's really important because it protects investors and these treasury strategies need to get institutional investors to sort of back the back this and become essentially create a two-way market so people can combine and sell these um with with real little price erosion.

Now, uh the second part though is someone say, "Well, Tom, why don't I just buy Ethereum ETF? " Yeah. Yeah. Or I'll just layer one and I think the treasury the Ethereum treasury strategy. Now there's another one which is sharp link um which was led by Joe Luben and consensus and that ticker is SBET.

I think the treasury strategies especially for Ethereum can actually deliver better returns um for holders because let's say the metric for a treasury strategy is um Ethereum per share. Um now if you buy an ETF, your Ethereum per share is going to always be fixed because it's you're just buying a unit of Ethereum.

So you only benefit if Ethereum price goes up. Whereas a treasury strategy, let's say has a Ethereum per share value, then there's three ways that that price of that treasury stock goes up. One is um that the company generates staking yield. So, you're getting a little income.

The second way that you benefit is if the company can capitalize on volatility. And Ethereum has twice the volatility of Bitcoin. Mhm. um which means the stock's twice as volatile.

That means you're you're going to be able to fund uh transactions like convertible instruments or sell stock in the open market and people are buying it for the liquidity and then you can increase the net asset value of Ethereum per share.

So you're kind of like growing someone's actually if you own a share of a treasury stock, someone's working to get you more Ethereum per share for every share you hold. So they're they're actually like growing it. And the third, of course, is the price of Ethereum goes up.

And that's where I think it's really interesting because like Circle, which is a the second largest stable coin issuer. And it's been a it's probably the most successful IPO in like several years, it trades at around 100 times enterprise value to Ebida. So, um, so for every dollar of Ebida, it's like $100 of market cap.

Um, Ethereum has a network yield of four. So in other words, like Ethereum's four times cheaper than Circle, even though Circle runs on Ethereum. So if usually like the more you get into the infrastructure layer, the higher the multiple is, that's why software has a higher multiple than a a retailer.

So that means like if but if you just said Ethereum should be a 1% yield then Ethereum should be like 12,000 um per unit and it's only like you know 20 500 now. So I think that there's the third way is of course Ethereum could go up a lot. Yeah.

What uh what do you see as kind of the important milestones in Ethereum over the next few years? uh we went through kind of the NFT boom. We're now in the stable coin era. Uh people have been still talking about store value. They're also starting to talk more about prediction markets.

Um what is interesting to you about uh maybe crypto broadly over the next few years? Um yeah, glad to. Well, you know what the I'd say the story arcs that we see is one the regulatory landscape has become very friendly for crypto. Um, huge deal.

Uh, the second is that institutional fiat money traditional is getting into crypto. 95% of institutions don't own crypto. So, that's a huge addressable market. Mhm. Uh but then there's technological innovation as you're pointing out and that and there's a lot of great projects because of that.

So Bitcoin um it's still our favorite layer one. Um and so you know but that to us is digital gold. You know it's it's really the best way to measure trust and if it ever traded at the value of gold's above ground value it's it's over a million dollars. So we still see a lot of upside.

Ethereum unique feature is the smart contract. Um, and we know that the majority of real world assets, tokenized things, including tokenized dollars and tokenized real estate and sec equities, etc. , um, they're actually being minted on the Ethereum or created on the Ethereum blockchain.

So I I think as the world starts to tokenize and experiment and remember there's a lot more equities and real world assets to tokenize onto layer ones then the other way is the traditional financial world is trying to equitize crypto right through ETFs. It's there's more to move into tokenizing on layer ones.

Um and the third of course is things like solving some of the risks of AI. You know the whole idea of a decentralized blockchain. I mean, look, let's face it. There is a a a non- insignificant risk that AI is going to be malevolent.

Like, there'll be a catastrophe because every innovation has always led to a catastrophe in the short term. Like um consumer credit was a technical innovation on um uh for consumer uh access to money and nearly every country that rolled out a credit card, whether it was Asia or Latin America, has had a credit crisis.

And then in 2008 we had a mortgage innovation with the securization of mortgages and it boomed for a while but then we had the GFC.

So I think AI is obviously going to be innovative and there's a lot of opportunities but it's inevitably inevitably going to lead to a catastrophe and I think that's when decentralized blockchains are going to be one one answer to sort of managing the risk around AI and so uh I mean I don't know if bit tensor is a solution but I can see something running off Ethereum and validators you know human validators um is one way too interesting yeah talked to brand about that any any reactions to there's been a couple announcements in the last week.

Republic came out creating their mirror tokens products which are bringing uh private company stocks on chain and then Robin Hood had an announcement I believe it was this morning around bringing OpenAI SpaceX on chain. Uh any any kind of predictions around uh private company uh assets coming on chain?

I I love all these experiments because they're trying to provide a a hybrid form of liquidity to things that are illquid, you know, and um so it it makes sense and um you know the the answer to that is it is a big deal that Republic and then Robin Hood are doing this because you're you're going to create uh the probability of a more healthy market.

you know, this has to become a two-way market because if someone's just tokenizing assets, but then very few people use it. And the way what I mean by use it, someone may want to own it, but someone might want to hedge something. So like an open AI token isn't just someone's long bet on OpenAI.

They might be invested in, you know, Grock or something and then they need to hedge it by shorting the token. Like if you can create a two-way market, then it's definitely going to work.

But if the if the market is purely on like let's just tokenize it, you buy it and hodddle it, then it's going to have the same liquidity problem that it originally had and then they might even trade it at discount and then you you create other risk because now you're putting it on a blockchain.

So now you have the actual risk of the physical asset being missing and then the blockchain being broken. So I think it'll be important for two-way markets to develop around it. Very cool. Well, congratulations. Yeah, congratulations on the announcement and uh we're excited to follow along.

Hopefully have you on again soon. Yeah. Fantastic. Well, thanks for having me. We'll talk to you soon. Cheers. Bye. Well, what else is going on? All of our ads. We are out of ads. We need to We need more sponsors, but more on that soon because we have a new one coming.

Um um there's a story on Apple weighing from Mark German weighing using anthropic or open AI to power Siri in a major reversal. But let's save it for tomorrow. Save it for tomorrow. We do have some other news. Cursor is now available on your phone and on the web.

Spin-off dozens of agents and review them later in your editor. Andrew says, I join Cursor to build the future of coding. And yes, as of today, you can code from anywhere with a coding assistant on every web browser and phone. Very, very cool.

We'll have to see how we'll have to give Tyler over there in the VR headset uh a challenge coding. There he is. What are you doing over there, Tyler? I'm just chilling in the metaverse. Oh, yeah. Yeah. But what what specifically are you doing? Are you I'm not playing video games. No, you're grinding. Oh, yeah. Yeah.

How how is the uh now that you've had this headset for a few hours? How it's sick? Wait, it's way better. So, I I have the Quest 2 at home and um I think it's just all the Quest 3s, but they have this like back strap. I don't know if you can see it, but I see it. It's way more comfortable.

Like I'm not It's like totally comfortable to wear this right now. That's awesome. Are So, are you doing pass through? Are you using your computer? I can see you guys right now. You can see me. Wow. I fingers. No way. Got it. How many fingers? Two. Oh, wow. You can see right through. It's amazing.

I don't I I didn't realize the password was that challenge. Don't take it off for 24 hours. starts now. Go on a date with it. Use Cley with it. Yes. Yeah. I mean, this is the Clue This is the Cluey device right here. We need a Cle app in there ASAP. ASAP. For sure. Yeah. You show up there. Why?

Why don't you take off your uh your MetaQuest 3s for the interview? Actually, I' I'd prefer to leave it on. Anyway, uh there's some other good posts we should go through. Uh, apparently Xfinity is allowing people to use Wi-Fi signals to detect motion in your home at no extra cost.

And uh, this 5 seconds uh, account says, "I apologize to all my local schizophrenic schizophrenics. I owe you an apology. I wasn't really familiar with your game because it's You remember there was a super there was a video that came out.

It was probably a year ago where somebody was showing how you can use Wi-Fi signals to people. Yeah. to get a very accurate map, a 3D render of what's happening in space. And this was60. It was almost hard to believe. And then now Xfinity for free, no extra cost. Crazy. Crazy.

The the the concerning thing here is is introducing this technology to more people. They're going to realize, oh, I can if they have if they're in apartment building, they're like, "Oh, I can see when my neighbor's home or a thief could set up a Wi-Fi router outside of somebody's home and start mapping it.

See what what what what's this person's schedule? When are you going to put this on a on an assault rifle and give the uh give the special forces wall hacks? " I bet they No, no.

Somebody was Somebody was saying the CIA and and other law enforcement groups use this already to understand when there's like an active shooter scenario, understand where they are, the positioning of everything. They got a fly on the set. Yeah, this is disaster. He's going after you.

Um but uh anyways, in other news, uh Kristoff Thulene Futurist says, "I am developing an LLM benchmark test that I believe is truly the first of its kind. Very excited to launch this soon and hopefully partner with some of the Frontier Labs on it. " Uh congratulations.

We'd love to check it out when it goes live, Kristoff. So, thanks for the hard work. Uh you're you're you're going up against Arc AGI. So, you know, it's a it's it's not an easy easy the benchmark battle is hot, but good luck to you. And uh Delian reflects on the progress of AI.

He says, "Uh, imagine gathering Allan Turing of 1942, Marvin Minsky of 1992, and Nick Bostonramm of 2012, and explaining to them that we have passed the Turing test several years ago. And yes, there are some changes to society, but largely day-to-day life is the same. Would be a funny conversation. It is it is crazy.

The soft singularity is real. Everyone's feeling the the soft acceleration. Um anyway, any other I mean it's just like Yeah, there's just like it. Yeah, we beat the touring test and now we're on to super intelligence and then eventually giga intelligence. Um but that's a great place to end the show. Thanks for watching.

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