The Ticker is $ETH

The ticker is $ETH.

Wall Street is having a crypto moment.

TradFi is running out of growth narratives. Everyone’s overexposed to AI, and software cos are nowhere near as exciting as they were in the 2000s and 2010s.

Deep down, growth investors who raised capital to deploy into exciting innovation stories with large TAMs know that most AI names trade at absurd premiums, and other “growthy” narratives are no longer easy to find. Even the once heralded FAANG stocks are slowly graduating into a quality, profit maxing, mid teens “compounders” bucket.

Fo reference, the median EV/Rev multiple for software names has declined to under 2.0x.

In comes crypto.

$BTC smashing through all-time highs, the POTUS max shilling our bags at press conferences, and a wave of regulatory tailwinds have catapulted our asset class back into the spotlight for the first time since 2021.

BTC COIN HOOD CIRCL vs. SPY and QQQ (Source: Artemis)

Instead this time, it’s not NFTs and dogecoin. This time, it’s digital gold, stablecoins, “tokenization” and payments reform. It’s Stripe and Robinhood claiming crypto is becoming the main priority for their next leg up. It’s $COIN entering the S&P 500. It’s Circle showing the world that crypto is an exciting enough growth story that growth stocks can disregard earnings multiples again.

But how does this all translate to $ETH?

To us crypto natives, the arena for smart contract platforms seems very fragmented. There’s Solana, there’s Hyperliquid, there’s a dozen new performant chains and rollups.

We know Ethereum’s lead has been truly challenged, and that it’s facing existential threats. We know it’s yet to fix value accrual.

But I highly doubt Wall Street knows this. In fact, I’d go so far to say most of the Wall Street casuals barely know anything about Solana. XRP, Litecoin, Chainlink, Cardano, and Dogecoin probably hold more external mindshare than $SOL if we’re being honest. Keep in mind these guys have tuned out of our entire asset class for a few years.

What Wall Street knows, is that $ETH is lindy, it’s battle tested, and it’s been the primary “beta play” to $BTC for years. What Wall Street sees is its the only other cryptoasset with liquid ETFs available. What Wall Street loves, is a good old relative value play with upcoming catalysts.

The suits don’t know much, but they know Coinbase, Kraken, and now Robinhood has decided to “build on Ethereum”. With minimal DD, they can figure out that Ethereum houses the largest pool of stablecoins onchain. They’ll start doing the moonmath, and quickly realize that while $BTC is at ATHs, $ETH is still 30%+ below where it was in 2021.

You might think relative underperformance looks bearish, but these people approach investing differently. They’d rather buy something lower with a defined target, than topblast a chart where they’re left wondering if they’re “already too late”.

And I think they’re already here. Mandates aren’t an issue, any fund can push for crypto exposure with the right incentives. Despite CT swearing for over a year now that they’ll never touch $ETH again, the ticker has been outperforming for over a month.

YTD, $SOLETH is down almost 9%. ETH dominance bottomed in May and has since put up its longest uptrend since the middle of 2023.

So if all of CT has labeled $ETH as THE cursed coin, how is it outperforming?

It’s attracting new buyers.

Spot ETF inflows have been uponly since March.

Source: Coinglass

$ETH microstrategy clones have been sending, adding early innings of structural leverage to the mix.

And just maybe, some crypto native participants have realized they are underexposed and have started rotating. Potentially out of their $BTC and $SOL positions that have printed over the last two years.

I am in no way saying that Ethereum has fixed anything. What I think will happen for now is that $ETH the asset begins to decouple from Ethereum the network.

External buyers are driving a paradigm shift for the $ETH asset, challenging our “down only” perception of it. Shorts will eventually get liquidated. And then our crypto native capital will decide to chase, before we get some form of a market-wide speculative frenzy for $ETH that ends in a spectacular top.

And if this happens, then ATHs are not that far away.

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