Ethereum Network Fees Boosted 30% by Stablecoins, Says Fundstrat Founder

Tom Lee, a renowned economist and the founder of Fundstrat, recently shared his views on the future of Ethereum and Solana, highlighting the significant role of stablecoins in the cryptocurrency market. Lee emphasized that stablecoins are widely accepted in both the digital and real worlds, enhancing the value of blockchains like Ethereum. He noted that stablecoins have reached a total market cap of $250 billion, with growth in this sector still in its early stages. The stablecoin business model is particularly attractive to banks, payment companies, and large retailers due to the interest earned on the collateral deposited, which is usually in US dollars. However, this income is not yet shared with users.

Lee pointed out that stablecoin usage offers several advantages for sellers, including low transaction costs and the elimination of risks such as “chargeback.” It also provides access to a wide range of users who do not use credit cards. He mentioned that 80% of stablecoin transaction volume occurs outside the US, with significant activity in regions like Singapore, Hong Kong, and Japan. In some countries, USDT is traded above $1 and is even used in real estate transactions. Lee also highlighted two main structural benefits of stablecoins for the US government: the global dominance of the dollar and the significant holdings of US Treasury bonds by stablecoin issuers. Tether (USDT), for instance, holds more US bonds than even Germany, making it the 12th largest holder of US Treasury bonds.

Lee argued that as more assets are traded on the blockchain, the demand for stablecoins will increase, which in turn will boost global demand for dollars. He also noted that stablecoins are at the intersection of financial services and crypto, where new generations of users expect their banks to be crypto-friendly. This has led institutions like Robinhood, Circle, Coinbase, JPMorgan, and Goldman Sachs to integrate cryptocurrencies into their balance sheets. In this context, assets like Bitcoin (BTC) and Ethereum (ETH) are expected to play an important role. Ethereum, in particular, stands out as the layer-1 blockchain where the majority of stablecoins are minted. The majority of real-world assets, such as stablecoins, tokenized stocks, and real estate, are traded on Ethereum. Today, 30% of Ethereum network fees come from stablecoins. According to U.S. Treasury Secretary Scott Bessent’s prediction, the stablecoin market could exceed $2 trillion. This would mean a 10x increase in Ethereum’s network revenues.

Lee noted that these developments present great opportunities not only for Ethereum (ETH) but also for other layer-1 projects like Solana (SOL) and companies that “hold crypto in the treasury” that generate returns through staking. He believes that as more developers and users recognize the benefits of these platforms, their value will continue to rise. Lee's optimism is based on the fundamental strengths of these cryptocurrencies, rather than short-term market fluctuations. He emphasized that the successful implementation of Ethereum 2.0 could position Ethereum as a dominant player in the decentralized finance (DeFi) space, driving further adoption and value appreciation. Turning to Solana, Lee praised its high transaction speed and low fees, which he believes make it a strong contender in the blockchain landscape. He pointed out that Solana's ability to handle thousands of transactions per second without compromising on security sets it apart from many other blockchain platforms. Lee also highlighted the growing number of projects and partnerships that Solana has attracted, indicating a strong ecosystem that could support long-term growth.