Mechanism Capital’s Andrew Kang Torches Tom Lee’s ETH Thesis as ’Financially Illiterate’

Crypto heavyweights clash over Ethereum's future in brutal takedown.

The Feud Explained

Mechanism Capital's Andrew Kang launched a scorching critique against Fundstrat's Tom Lee this week, calling his Ethereum investment thesis 'financially illiterate' in what industry watchers are calling the most brutal takedown of 2025. The confrontation highlights the deepening divide between traditional finance veterans and crypto-native analysts.

Wall Street vs Crypto Natives

Lee's bullish ETH stance—based on traditional valuation metrics—collides with Kang's crypto-first framework that prioritizes network fundamentals over legacy financial models. The dispute exposes the growing tension between established financial institutions and decentralized finance purists.

Market Impact

Traders are watching the clash closely as Ethereum faces increased regulatory scrutiny and technical challenges. Kang's criticism lands at a critical juncture for the second-largest cryptocurrency, with institutional adoption hanging in the balance.

Another day, another Wall Street analyst trying to fit decentralized protocols into spreadsheets—some things never change.

Digital Oil: A Weak Analogy

Lee also compares Ethereum to “digital oil,” a metaphor Kang dismisses as misguided. “Oil is a commodity. Real oil prices adjusted for inflation have been trading in the same range for over a century with periodic spikes that revert,” he writes.

If ETH is to be viewed in commodity terms, Kang believes that is not inherently bullish. “Not sure what Tom’s trying to do here,” he added.

Institutional Adoption Still Missing

Another plank of Lee’s thesis is that large institutions will buy and stake ETH to secure networks where their assets are tokenized. Kang was blunt in rebuttal: “Have large banks and other financial institutions bought ETH on their balance sheet yet? No. Have any of them announced plans to? Also no.”

He likens the idea to banks hoarding barrels of gasoline simply because they consume energy. “They just pay for it when they need to. Do banks buy stocks of asset custodians they use? No.”

For Kang, the analogy highlights how unrealistic it is to expect institutions to hold ETH in significant amounts for operational reasons.

Overvaluation and Technical Analysis

Kang also criticizes Lee’s claim that ETH could be worth as much as all financial infrastructure companies combined, calling it “a fundamental misunderstanding of value accrual and just pure delusion.” While he acknowledges that technical analysis can be useful, he accuses Lee of misusing it to reinforce bias.

Ultimately, Kang argues Ethereum’s current valuation is propped up by “financial illiteracy,” comparing it to XRP’s inflated market cap. “Broader macro liquidity has kept ETH market cap afloat, but unless there is major organizational change it is likely destined to indefinite underperformance.”

Kang Takes $200M Long Position on Bitcoin

Kang has reportedly doubled his bullish bet on Bitcoin, taking a $200 million long position, according to on-chain data analyzed by crypto analytics platform Arkham.

In an April 12 post on X, Arkham reveals that a wallet tied to Kang made a second $100 million Leveraged long bet on Bitcoin, bringing his total position to $200 million.

The recent trade carries an estimated potential gain or loss of around $6.8 million, reflecting Kang’s confidence in a near-term Bitcoin rally.