Can the ETH micro-strategy craze replicate the success of BTC?

Recently, the ETH version of "MicroStrategy" has sparked heated discussions. Can this model be as successful as BTC MicroStrategy? Here are a few points of view:

1. The ETH micro-strategy has indeed drawn on the successful experience of BTC, and in the short term, it may attract more US stock companies to follow suit, creating a positive cycle. Regardless of the actual participants in US stock trading, the practice of traditional institutional funds and retail investors treating ETH as a reserve asset has indeed helped Ethereum emerge from a long-term period of stagnation.

   This wave of increase still follows the basic rules of the cryptocurrency bull market, with the difference being that the driving force has shifted from purely retail cryptocurrency investors to actual funds from Wall Street. This at least proves that ETH is no longer solely reliant on narratives within the crypto circle and is beginning to attract incremental funds from outside the circle.

2. BTC is closer to the positioning of "digital gold" as a reserve asset, with a relatively stable value and clear expectations. In contrast, ETH is essentially a "productive asset," with its value closely related to factors such as the usage rate of the Ethereum network, Gas fee revenue, and ecological development. This means that the volatility and uncertainty of ETH as a reserve asset are greater.

If the Ethereum ecosystem encounters significant technical security issues, or regulatory authorities impose restrictions on functions such as DeFi and Staking, the risks and volatility faced by ETH as a reserve asset will far exceed those of BTC. Therefore, although the narrative logic of the BTC version of MicroStrategy can be referenced, the market pricing and valuation logic may not necessarily 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 native yield of 3-4%, making it the "on-chain interest-bearing national debt" in the crypto world.

Organizations recognize this concept. In the short term, it may be detrimental to previous efforts to build second-layer networks and other infrastructure for BTC to provide native asset yields. However, in the long run, once ETH plays a greater role as a catalyst for programmable yield-bearing assets in ETH micro-strategies, it may instead stimulate the accelerated development of the BTC ecosystem and improve infrastructure.

4. This round of micro-strategy craze has essentially reshaped the narrative direction of cryptocurrency. In the past, project teams built projects and communicated technological narratives mainly aimed at venture capitalists and retail investors, that is, the natives of the crypto circle. However, the new narrative now, whether it involves real-world assets or traditional finance, needs to be conveyed to Wall Street.

The key difference is that Wall Street cannot be fooled by pure concepts; they need a fit between the product and the market - real user growth, revenue models, market size, etc. This forces crypto projects to shift from a "technology narrative orientation" to a "business value orientation," which is precisely the pressure that competing products have put on Ethereum, and ultimately they will have to face this challenge.

5. The participants in this round of micro-strategy concept in the US stock market are mostly companies facing sluggish growth in traditional capital market businesses, needing to integrate cryptocurrencies to seek new breakthroughs. They choose to invest fully in crypto assets, often because their main business lacks growth points and they have to seek new value growth engines.

These operating entities are so aggressive largely because they are taking advantage of the "arbitrage window" created by the U.S. government's strong push for reform in the cryptocurrency industry before the regulatory framework matures. In the short term, they have indeed exploited many legal and compliance loopholes, such as the ambiguity in accounting standards for classifying crypto assets, the lax disclosure requirements from the SEC, and the gray areas in tax treatment.

MicroStrategy's success is largely attributed to the benefits of this super bull market for BTC, but as a replicator, one may not have the same luck and operational capability. Therefore, the market enthusiasm brought by this operation is not much different from the previous pure crypto-native narrative hype; essentially, it is also a gamble and trial-and-error, and investors must be wary of the risks.

This wave of microstrategy craze is more like a "big drill" for cryptocurrencies to enter the mainstream financial system. If successful, everyone will be happy, and if it fails, it will still be a small victory. After all, any attempt to pull ETH out of the narrative quagmire, regardless of success or failure, is a form of progress.