With major cryptocurrencies dropping in prices, long-time gold advocate Peter Schiff and crypto investor Andrew Kang have seized the moment to argue that recent declines vindicate their warnings about the valuations and misplaced optimism surrounding Bitcoin and Ethereum respectively.
The recent market backdrop has given voice to skeptics. Ethereum has slipped below $4,000, and Bitcoin has shed some of its recent gains. This has caused the total cryptocurrency market capitalization to fall by more than 6.6%.
Analysts continue to disagree on whether this marks the start of a longer downturn or if it’s just a “bear trap” within a continuing cycle.
Schiff reignites long-standing skepticism
Schiff, chief economist and strategist at Euro Pacific Capital, has for years dismissed Bitcoin as “digital fool’s gold.” He renewed his critique this week by highlighting the decline in Michael Saylor’s Strategy (formerly Microstrategy with the ticker $MSTR).
“Few have noticed that $MSTR is down 45% from its Nov. 2024 high. This is going to be a brutal bear market for Bitcoin treasury companies. I’m not sure if any, including MSTR, will survive it,” he posted on X.
He recently pointed out that Bitcoin was down about 20% against gold, calling it evidence of a bear market.
Crypto bulls under attack
Kang’s posts came as a result of Tom Lee’s recent comments on Ethereum. Tom Lee, co-founder of Fundstrat and chairman of BitMine, at a recent event, said that Ethereum could as high as up to $12,000–$15,000 by the end of 2025, driven by adoption on Wall Street and support from a crypto-friendly Trump administration.
As reported by Cryptopolitan, Lee described Ethereum as a “neutral chain” capable of attracting both banks and regulators, and argued that its role in tokenized assets, stablecoins and even artificial intelligence would usher in a decade-long “super cycle.”
Lee’s company, BitMine, has restructured its balance sheet around Ethereum and now holds 2.15 million ETH, the largest treasury in the world. The bet has lifted its market capitalization from $37.6 million in June to $9.45 billion by September.
His claims saw people 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 the loudest voices as he launched a detailed rebuttal on X, dismissing Lee’s thesis as “one of the most financially illiterate arguments” he had seen from a high-profile analyst.
Andrew Kang launches counteroffensive
Kang claims that Ethereum’s fundamentals do not support such lofty valuations. While tokenization of real-world assets and stablecoin volumes have risen “100 to 1,000-fold” since 2020, he noted that network fee revenue has not scaled accordingly.
According to him, efficient upgrades, the migration of activity to rival chains such as Solana and Arbitrum, and the low turnover of tokenized bonds and securities have limited fee growth. “You could tokenize a trillion dollars’ worth of assets, but if that’s not moving around much, then it maybe would only add $100k worth of value to ETH,” Kang wrote.
He also rejected Lee’s claim that institutions would accumulate ETH to secure the network, stating that no major banks have yet purchased or staked the asset.
Technically, Kang suggested Ethereum is more likely to remain trapped in a range between $1,000 and $4,800 than to break out to new highs.
In a later post, he went further, branding Ethereum “Luna 2.0” — a reference to the Terra blockchain whose collapse in 2022 wiped out billions in investor capital. He has also reportedly put his money where his mouth is, placing put options to bet on further declines for Ethereum.
However, it’s worth noting that Kang is quite bullish on Bitcoin and has long been bearish on Ethereum. Some of his predictions about ETH’s impending doom have failed in the past, too.
