Can ETH really replicate the MicroStrategy Summer craze?

Author: Haotian

Regarding the Ethereum version of "Micro Strategy Summer" craze, can $ETH really replicate the "positive flywheel" of BTC Micro Strategy? Talk about some personal opinions:

1) ETH Micro Strategy is indeed a successful model for emulating BTC Micro Strategy. In the short term, many US stock companies will try Fomo and form a wave of positive flywheels. Regardless of the main body of US stock trading, the fact that the real traditional institutional funds and stockholders' buying power use $ETH as a reserve asset has brought Ethereum out of its long-term weak state.

In other words, Fomo drives the rise, which is the unchanging iron law of the bull market in the cryptocurrency circle. However, this time the main body of Fomo is no longer pure retail investors in the cryptocurrency circle, but real money from Wall Street. At least it verifies that ETH has finally gotten rid of the dilemma of relying purely on the narrative of cryptocurrency stacking and started to attract incremental funds from outside the circle;

2) BTC is closer to the reserve asset positioning of "digital gold", with relatively stable value and clear expectations, while ETH is essentially a "productive asset" whose value is bound to multiple factors such as the utilization rate of the Ethereum network, gas fee income, and ecological development. This means that ETH as a reserve asset has greater volatility and uncertainty.

Once the Ethereum ecosystem encounters major technical security issues, or the regulators put pressure on DeFi, Staking and other functions, the risks and volatility variables faced by ETH as a reserve asset are much greater than those of BTC. Therefore, the narrative logic of the BTC version of MicroStrategy can be used as a reference, but it does not mean that the market pricing and valuation logic can also remain consistent;

3) Compared with BTC, the Ethereum ecosystem has more mature DeFi infra accumulation and richer narrative ductility. Through the staking mechanism, ETH can generate a native yield of about 3-4%, which makes it equivalent to the "on-chain interest-bearing treasury bonds" in the crypto world.

Institutional Buy-in is a negative factor for the original construction of BTC layer2 and other infras to provide native asset interest for BTC in the short term, but in the long term, it is just the opposite. Once ETH plays a greater role as a catalyst for programmable interest-bearing assets in ETH micro-strategies, it will stimulate the BTC ecosystem to develop faster and fill the basic infra;

4) This round of micro-strategy Summer is essentially a major reshuffle of the narrative orientation of Crypto in the past. The original project parties built projects and spread technical narratives to VCs and retail investors in the market. To put it bluntly, they were all told to the natives of the currency circle. Now this round of new narratives, whether it is RWA or TradiFi, may have to tell stories to Wall Street in the future.

The key difference is that Wall Street does not eat pure concept cakes. What they want is PMF-real user growth, revenue model, market size, etc. This forces crypto projects to shift from "technical narrative orientation" to "commercial value orientation". Isn't this the pressure that the previous competitor Solana brought to Ethereum? It still has to be faced after all;

5) Most of the US stock micro-strategy concept operators in this round, including SharpLink Gaming, Bitmine immersion Tech, Bit Digital, BTCS inc., etc., are companies with weak business growth in the traditional capital market and need to integrate Crypto to find new breakthroughs. They choose to all-in crypto assets, often because the main business lacks growth points and has to seek new value growth engines.

The reason why these operators dare to be so radical is largely to take advantage of the "arbitrage window" before the US government's drastic reforms to the crypto industry mature regulatory mechanism. In the short term, many legal and compliance loopholes have been exploited-such as the ambiguity of accounting standards on the classification of crypto assets, the looseness of SEC disclosure requirements, and the gray area of tax treatment.

MicroStrategy’s success is largely due to the dividends of BTC’s super bull market, but as a copier, it may not have the same luck and trading ability. Therefore, the market heat brought by the main operator this time is not much different from the previous pure Crypto native narrative hype. In essence, it is also a gamble and trial and error. Remember to be vigilant about investment risks.

Note: This round of MicroStrategy Summer is more like a "big exercise" for Crypto to enter the mainstream financial system. If it succeeds, everyone is happy, and if it fails, it is a small joy (after all, the experiment that can drag ETH out of the quagmire of narrative weakness is a success!)