Author: MONK
Translated by: TechFlow
The trading code is $ETH.
Wall Street is experiencing a crypto highlight moment.
Traditional Finance (TradFi) is running out of growth narrative resources. Artificial Intelligence has become the market's hot spot, but attention to it has been excessive, and software companies are no longer as attractive as they were in the 2000s and 2010s.
Deep down, growth investors who raise capital for innovative stories and large serviceable markets (TAM) know that most AI-related companies are valued at ridiculous premiums, and other so-called "growth" narratives are no longer easy to find. The once-revered FAANG stocks are gradually transforming into "high-quality, profit-maximizing, medium-growth" composite assets.
For example, the median enterprise value to revenue (EV/Rev) multiple for software companies has dropped below 2.0x.
At this moment, cryptocurrency enters the stage.
Bitcoin ($BTC) breaks through historical highs, the U.S. President strongly promotes our assets at a press conference, and a wave of regulatory benefits brings crypto asset categories back into the spotlight for the first time since 2021.
BTC, COIN, HOOD, Circle vs. SPY and QQQ (Source: Artemis)
This time, the protagonists are not NFTs and Dogecoin. This is the era of digital gold, stablecoins, "tokenization", and payment reform. Stripe and Robinhood are claiming that cryptocurrency will be their next core growth focus; $COIN (Coinbase) successfully joined the S&P 500; Circle shows the world that cryptocurrency is attractive enough to make growth stocks ignore earnings multiples again.
But how is this related to $ETH?
For us crypto natives, the smart contract platform domain looks very fragmented. There's Solana, Hyperliquid, and dozens of emerging high-performance blockchains and Rollups (on-chain scaling solutions).
We know Ethereum's leading position has been truly challenged, and it faces an existential threat. We also know it has not yet solved the value capture problem.
But I very much doubt whether Wall Street understands these. In fact, I can boldly say that most Wall Street investors know almost nothing about Solana. If we're honest, XRP, Litecoin, Chainlink, Cardano, and Dogecoin probably have higher external market recognition than $SOL. After all, these people have been indifferent to the entire crypto asset class for years.
What Wall Street knows is that $ETH represents the "Lindy effect" (indicating that things that have long existed are more likely to continue existing), has been battle-tested, and has been the main "beta investment choice" for $BTC for years. Wall Street sees that $ETH is the only other crypto asset with a liquidity ETF. Wall Street is keen on upcoming catalysts and classic relative value investing.
Those investors in suits may not know much about cryptocurrency, but they know that Coinbase, Kraken, and now Robinhood have all decided to "build on Ethereum". Through minimal due diligence, they can discover that Ethereum has the largest stablecoin pool. They will start calculating "moon math" and quickly realize that while $BTC has reached historical highs, $ETH is still more than 30% below its 2021 peak.
You might think that relative underperformance looks pessimistic, but these people have different investment approaches. They are more willing to buy assets with lower prices and clear goals, rather than chasing high assets that make them question whether they have "missed the opportunity".
I think they have arrived. Investment authorization is not an issue; any fund can drive crypto exposure through appropriate incentives. Although Crypto Twitter (CT) has claimed for over a year that they won't touch $ETH, the trading code has performed consistently well over the past month.
As of this year, $SOLETH has dropped nearly 9%. Ethereum's market dominance bottomed in May and has since created the longest upward trend since mid-2023.
If the entire Crypto Twitter (CT) has marked $ETH as a "cursed coin", why does it still perform well?
The answer is: It is attracting new buyers.
Since March this year, spot ETF capital inflows have been consistently one-way growth.
Source: Coinglass
Similar to $ETH Microstrategy clone funds are heavily adding positions, introducing early structural leverage to the market.
Perhaps some crypto natives realize their $ETH exposure is insufficient and are starting to rebalance positions, possibly exiting from the outstanding performers of the past two years, $BTC and $SOL, to layout Ethereum.
I'm not saying Ethereum has solved its existing problems. I think what might happen at this stage is that $ETH as an asset begins to decouple from the Ethereum network itself.
External buyers are driving a paradigm shift in $ETH assets, challenging our inherent perception that it "can only decline". Short sellers will eventually be forced to close positions. Then, native crypto capital will start chasing the upward trend until a comprehensive speculative frenzy about $ETH appears in the market, ending with a spectacular top.
If all this really happens, then the all-time high (ATH) won't be too far away.
