Analyzing the Institutions Behind FOMO: Can the "Yield-Generating Asset" Narrative of ETH Microstrategy Break Through the Valuation Logic of BTC?

Author: Haotian

Around the recent Ethereum version of the "MicroStrategy Summer" craze, can ETH really replicate the "positive flywheel" of BTC MicroStrategy? Here are some personal viewpoints:

1. ETH MicroStrategy is indeed modeled after the successful example of BTC MicroStrategy. In the short term, many US stock companies will try to FOMO, creating a positive feedback loop. Regardless of how the US stock market is operated, the fact that traditional institutional funds and retail investors are using real money to buy ETH as a reserve asset effectively pulls Ethereum out of its long-term weak state.

In other words, the rise driven by Fomo is an unchanging iron law of the crypto market bull run. However, this time the main body of Fomo is no longer purely retail investors from the crypto space, but real money from Wall Street. This at least verifies that ETH has finally broken free from the predicament of purely relying on the stacking narrative within the crypto circle and has begun to attract incremental funds from outside the circle.

2. BTC is closer to the positioning of a "digital gold" reserve asset, with relatively stable value and clear expectations, while ETH is essentially a "productive asset," whose value is tied to multiple factors such as the usage 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 put pressure on functions like DeFi and Staking, the risks and volatility variables that ETH faces as a reserve asset are much greater than those for BTC. Therefore, the narrative logic of the BTC version of MicroStrategy can be referenced, but 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 an approximate 3-4% native yield, making it equivalent to "on-chain interest-bearing government bonds" in the crypto world.

The institution's Buy-in story appears to be a short-term negative for the original infrastructure built for BTC, such as BTC layer 2, which provides native asset yield. However, in the long term, it is quite the opposite. Once ETH plays a greater catalytic role as a programmable yield asset in ETH micro-strategies, it will instead stimulate the BTC ecosystem to develop its foundational infrastructure more rapidly.

4. This round of micro-strategy Summer is essentially a major reshuffle of the narrative direction in Crypto's past. Originally, project parties built projects and spread technological narratives to tell VC and retail investors in the market, to put it bluntly, it was all aimed at the native residents of the crypto world. Now, this new narrative, whether it's RWA or TradiFi, may eventually need to tell stories to Wall Street.

The key difference is that Wall Street doesn't invest in pure conceptual ideas; what they want is 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 the competitor Solana put on Ethereum? Ultimately, it has to be faced;

5. This round includes US stock micro-strategy entities such as SharpLink Gaming, Bitmine immersion Tech, Bit Digital, and BTCS inc. Most of them are companies in traditional capital markets that are struggling with business growth and need to integrate Crypto to find new breakthroughs. They often choose to go all-in on crypto assets because their main business lacks growth points and they are forced to seek new value growth engines.

The reason why these trading entities dare to be so aggressive is largely because they are taking advantage of the "arbitrage window" before the regulatory mechanisms mature, which is being propelled by the U.S. government’s vigorous push for reform in the cryptocurrency industry. In the short term, they have exploited many legal and compliance loopholes—such as the ambiguity in accounting standards regarding the classification of crypto assets, the leniency of SEC disclosure requirements, and the gray areas in tax treatment, etc.

MicroStrategy was able to benefit significantly from this round of the super bull market in BTC, but as a replicator, one may not have the same luck and trading ability. Therefore, the market enthusiasm brought by the main trading entity this time is not much different from the previous pure Crypto native narrative hype; fundamentally, it is also a gamble and trial-and-error, so be sure to remain vigilant about investment risks.

Note: This round of micro-strategy Summer is more like a "big drill" for Crypto to enter the mainstream financial system. If successful, everyone will be happy; if it fails, it will still be a small joy (after all, any experiment that can pull ETH out of the narrative quagmire is a success, regardless of the outcome!)