Author: Haotian
Surrounding this Ethereum version of the 'microstrategy Summer' craze, can ETH really replicate the 'positive flywheel' of BTC microstrategy? Here are several personal viewpoints:
1) The ETH microstrategy is indeed modeled after the successful example of BTC microstrategy. In the short term, many US stock companies will attempt FOMO, forming a positive flywheel. Regardless of how the trading entity operates in the US stock market, the fact that traditional institutional funds and retail investors are buying ETH as a reserve asset has significantly lifted Ethereum out of its long-term weak state.
In other words, the rise driven by FOMO is an unchanging iron law of the crypto bull market; however, this time the FOMO subject is no longer pure retail investors from the crypto circle, but rather the real money from Wall Street. At least it validates that ETH has finally escaped the predicament of solely relying on the stacking narrative of the crypto circle and has begun to attract incremental funds from outside the circle.
2) BTC is closer to the positioning of a reserve asset as 'digital gold,' with relatively stable value and clear expectations, while ETH is essentially a 'productive asset,' with its value bound to multiple factors such as the utilization rate of the Ethereum network, Gas fee income, and ecological development. This means that the volatility and uncertainty of ETH as a reserve asset are greater.
Once the Ethereum ecosystem encounters significant technical security issues, or if regulators apply pressure on DeFi, Staking, and other functions, the risks and volatility variables faced by ETH as a reserve asset are much greater than those for BTC. Therefore, while the narrative logic of the BTC version of microstrategy can be referenced, it does not mean that the market pricing and valuation logic can remain consistent.
3) The Ethereum ecosystem has a more mature DeFi infrastructure accumulation and richer narrative extensibility compared to BTC. Through the staking mechanism, ETH can generate approximately 3-4% native yield, which makes it comparable to 'on-chain yield-generating government bonds' in the crypto world.
The institutional buy-in story is, in the short term, a negative for the previously constructed BTC layer 2 and other infrastructures that provide native asset yields for BTC. However, in the long run, the opposite is true. Once ETH serves as a catalyst for programmable yield-generating assets in the ETH microstrategy, it will instead stimulate the BTC ecosystem to develop more rapidly and fill in the foundational infrastructure.
4) This round of microstrategy Summer is essentially a major reshuffle of the narrative orientation of Crypto in the past. Originally, project teams constructed projects and spread technical narratives to VCs and retail investors, essentially telling the story to the original inhabitants of the crypto world. Now, this new narrative, whether it is RWA or TradiFi, will likely have to tell stories to Wall Street in the future.
The key difference is that Wall Street does not invest in pure concepts; they want PMF—real user growth, revenue models, market size, and so on. This forces crypto projects to shift from a 'technology narrative orientation' to a 'business value orientation.' Isn't this the pressure that competitors like Solana have brought to Ethereum? Ultimately, it must be faced.
5) This round of microstrategy concepts in the US stock market, including SharpLink Gaming, Bitmine immersion Tech, Bit Digital, BTCS Inc., etc., are mostly companies that have seen sluggish growth in traditional capital market businesses and need to integrate Crypto to find new breakthroughs. Their decision to all-in on crypto assets often stems from a lack of growth points in their main business, forcing them to seek new value growth engines.
The reason these trading entities dare to be so aggressive is largely due to exploiting the 'arbitrage window' before the regulatory mechanisms for the crypto industry mature, as the US government pushes for sweeping reforms. In the short term, they have taken advantage of several legal and compliance loopholes—such as the ambiguity in accounting standards for classifying crypto assets, lax SEC disclosure requirements, and gray areas in tax treatment.
The success of microstrategy largely benefited from the dividends of this super bull market in BTC, but as a replicator, it may not have the same luck and trading ability. Therefore, the market heat brought by the current trading entity does not differ much from the previous pure Crypto-native narrative hype; fundamentally, it is still high-stakes gambling and trial and error, so be cautious of investment risks.
Note: This round of microstrategy Summer is more like a 'big drill' for Crypto to enter the mainstream financial system. If successful, everyone is happy; if it fails, it's a small joy (after all, any experiment that can pull ETH out of the narrative quagmire is a success, regardless of failure!).
