Ethereum Joins the War Economy Club, Leaves Bitcoin Holding the Bag: Tom Lee

Tom Lee is calling Ethereum the No. 2 'wartime' asset, and honestly, the numbers are making a lot of sense. Move over, maxi narratives—apparently what ETH really needed to moon was some good old-fashioned geopolitical chaos. Who knew?

Since the latest Middle East conflict escalated, Ether has been the second-best-performing major asset globally—trailing only top safe-haven trades while beating both Bitcoin and equities, according to Fundstrat co-founder Tom Lee. Bitcoin? It's sitting in third place, clutching its "store of value" narrative like a man clutching his belongings while his apartment burns down.

In a recent post shared by the TomLeeTracker X account, Lee noted that while 'crypto has been outperforming since the war started,' Ether has led the pack, with both digital assets 'significantly' outpacing the stock market. The stock market, for those keeping score at home, is apparently just there to make crypto look good now.

Lee quantified the current war impulse at roughly $30 billion per month in additional government outlays and warned this figure 'could rise to a scale of $100 billion' if the conflict broadens—effectively turning defense budgets into a persistent fiscal shock. That's a lot of missiles. That's a lot of tax dollars going boom.

He also pointed out that the drag from higher oil is smaller than many investors assume. Each $10 increase in crude prices adds only about $4 billion to $5 billion per month in pressure on US consumers. Lee argues this arithmetic means the net macro effect still leans toward stimulus rather than contraction, even with oil near $100 per barrel. Your gas tank hates it, but your 401(k) might actually survive.

Fundstrat's March research shows Ethereum up roughly 17% on a relative basis versus the S&P 500 since the US-Israeli conflict with Iran began in late February, beating Bitcoin, gold, real estate, MSCI World Energy and the 'Magnificent 7' tech stocks. ETH is out here doing lap dances around the Magnificent 7 while Bitcoin is in the corner trying to explain to gold why nobody invited it to the party.

'As a wartime store of value, crypto looks a lot stronger,' Lee said, adding that 'crypto has been outperforming since the war started while gold has actually underperformed.' His call? 'Ditch gold, buy crypto.' Goldbugs are crying into their vaults right now.

Ethereum's outperformance is backed by structural factors: a market cap near $230 billion, growing institutional positioning and a staking rate approaching 30% of total supply that tightens available float. Nothing says "I'm a serious asset class" like validators locking up nearly a third of supply like it's a giant cryptographic savings account.

Lee, a long-time Ether bull who chairs Bitmine Immersion Technologies, has maintained a long-time price target of $250,000 for ETH. Bitmine recently disclosed another $133 million purchase, lifting its Ethereum holdings above $9 billion. That's not a position, that's a marriage.

Against this backdrop of elevated fiscal spending and volatile energy prices, Lee says the allocation value of crypto as both 'liquidity and risk assets' is rising. He argues that defense outlays and still-accommodative financial conditions create a powerful liquidity environment in which high-beta assets like Ethereum and Bitcoin can benefit disproportionately. War is hell, but apparently it's great for altcoin portfolios.

In earlier research, Lee emphasized that 'stock markets bottom in the early stages of military conflict,' suggesting the recent outperformance of Ether and Bitcoin could be an early signal of how capital will be repriced if the conflict and spending surge persist. So basically, the early bird gets the yield, and the late bird gets rekt by inflation. Classic.