In early January, under East 8 Time, Ethereum quietly completed a shift in its narrative evolution for 2024: from a purely "smart contract infrastructure," it has been repackaged as a "tech growth stock" that carries cutting-edge applications such as AI, modularization, and data availability. In terms of price, ETH has overall underperformed BTC since the end of 2023, but the ecological tokens surrounding new narratives like EigenLayer, Blast, and AI Agent have surged in succession, indicating a subtle "style drift" of funds on-chain. Against the backdrop of the approval of the US spot BTC ETF, rising expectations for the ETH ETF, and continuous new highs in L2 TVL, the valuation framework and funding logic of Ethereum are being rewritten by institutions and traders.
Why Ethereum is Repriced as a "Tech Growth Stock"
The rebranding of Ethereum as a "tech growth stock" is not just a market joke, but the result of multiple structural changes. First, from a technical trajectory perspective, after the Ethereum mainnet transitioned to PoS, the roadmap shifted its focus from "single-chain scaling" to a modular architecture of "Rollup + DA," with upgrades like Danksharding and EIP-4844 positioning the mainnet as a high-value settlement and data availability layer. This "do less but do it well" approach is highly similar to the evolution of traditional internet infrastructure towards high-value cloud services. Secondly, from an application perspective, new projects such as AI Agents, decentralized reasoning networks, and on-chain data markets almost naturally choose the EVM ecosystem as their landing environment, partly because Ethereum has the highest asset and user density, and partly due to its path dependency on security and development toolchains, locking in the first large-scale testing ground for "AI x Crypto" on the EVM. Meanwhile, the funding side is also signaling its pricing through indicators: from the end of 2023 to the beginning of 2024, the TVL of the Ethereum ecosystem saw a significant rise across multiple L2 and restaking tracks, with the locked assets of leading L2s accounting for a high proportion of Ethereum's overall TVL. Some restaking protocols attracted billions of dollars in ETH and LST staking in a short period, creating a phenomenon where "tech growth-type" projects cluster together, making Ethereum resemble a comprehensive platform that integrates AI, cloud computing, and security services, rather than a single public chain asset. Under this narrative switch, the market naturally tends to view its valuation elasticity and risk premium through a lens closer to "tech growth stocks."
How Funds are Voting: From ETH Itself to New Narrative Ecosystems
The voting path on the funding side is not simply reflected in the spot price of ETH, but spreads along Ethereum's "new infrastructure" and parallel narratives:
● Ethereum Mainnet and L2 TVL: Data shows that from Q4 2023 to early 2024, the overall TVL of the Ethereum ecosystem experienced a recovery rise, with the locked assets of leading L2s reaching the billion-dollar level, and some networks' TVL more than doubling from mid-year lows, indicating a significant migration of ETH and stable assets to scaling layers and new protocols.
● Restaking and AVS: Restaking protocols like EigenLayer took less than a quarter from opening the staking window to breaking the billion-dollar TVL level, with a large amount of LST and native ETH locked, reflecting that funds are willing to bet on a premium for new narratives like "security as a service" and "Active Verification Service (AVS)."
● AI-related Tracks: Among tokens related to decentralized computing power, reasoning networks, and AI Agents, some projects achieved several-fold increases in a short period, with on-chain active addresses and transaction volumes increasing, indicating that the market is pricing these assets in a "high Beta tech stock" manner, contrasting sharply with traditional DeFi blue chips.
● Comparison of ETH and BTC Performance: Although BTC attracted more direct incremental funds after the approval of the spot ETF, leading to a significant increase in market cap share, the "tech growth" narrative of ETH led some funds to take a detour: reducing ETH spot holdings and long-term locked positions while increasing allocations to L2, restaking, and vertical track tokens, thereby amplifying their leveraged exposure to Ethereum's structural upgrades.
From these paths, it can be seen that funds are not holding ETH in a "traditional blue-chip large-cap" manner, but are breaking it down into a series of growth factors around security, scaling, data, and AI, placing bets on different protocols and assets. This structural layout aligns with the funding behavior characteristics of "tech growth stocks" in traditional markets.
Can the Tech Growth Logic Support Ethereum's New Cycle?
When Ethereum is placed back into the valuation framework of "tech growth stocks," the market needs to reassess its profit model and competitive landscape, not just the static numbers of fee burning and staking yields. Unlike traditional internet giants, Ethereum does not directly "monetize" user data or advertising traffic; its value is more reflected in the scarcity of settlement layer security, asset issuance, and data availability. The fee burning mechanism after EIP-1559 gives ETH a hybrid attribute of "equity + buyback" during high-load periods, while the halved issuance pressure post-merge amplifies this attribute's elasticity during macro liquidity easing phases. Ethereum resembles a "tech growth stock" also because of the misalignment between its technological cycle and macro environment: on one hand, the global demand for AI, computing power, and data sovereignty is surging, prompting more developers to attempt on-chain solutions for trustworthy computing, incentives, and collaboration issues; on the other hand, the regulatory and compliance processes within the crypto industry are still in their early stages, especially regarding the rules surrounding securities attributes and token issuance, which means that while Ethereum benefits from its "infrastructure" positioning in attracting institutional funds, it also bears the discount brought by regulatory uncertainties. Meanwhile, new public chains and DA solutions under the modular narrative, akin to the early stage of cloud computing where many competitors emerged, pose both competition to Ethereum and, in an intangible way, validate the market demand for the "settlement layer + DA" route. As long as Ethereum maintains irreplaceability in terms of security and decentralization, it can transform competition into valuation premiums through compatibility and absorption of external ecosystems, rather than dilution.
Optimism and Caution: The Bull-Bear Clash Under the Tech Growth Narrative
Around the new label of "Ethereum = Tech Growth Stock," internal market divisions persist, with evidence readily available for both optimists and cautious investors. Supporters of the bullish view argue that Ethereum's core advantage comes from its "network effects + developer density." In the context of simultaneous launches across multiple tracks like L2, restaking, AI, and DePIN, it resembles an "index base" holding a basket of tech growth stocks; any success in a high-speed track will ultimately flow back to ETH's intrinsic value through settlement layer and staking demand. Additionally, upgrades like EIP-4844 will significantly improve L2 costs, opening up space for more high-frequency applications, seen as a prelude to a "second wave of DeFi Summer" and "on-chain AI native applications." However, cautious voices cannot be ignored; they emphasize the time lag between valuation and realization. Many "high-growth narrative" projects in the Ethereum ecosystem have gained market caps far exceeding fundamental support in a short time, while ETH's fee income and on-chain activity have not shown explosive growth matching the stock price level. This "story first, data lagging" model, if compounded by tightening macro liquidity, could amplify the magnitude of pullbacks when risk appetite declines. Furthermore, regulatory uncertainty is also a risk point frequently mentioned by bears, especially under the premise that the definition of securities attributes and institutional holding restrictions remain gray areas, making it difficult for ETH to achieve the undisputed "digital gold" status like BTC through a spot ETF, thus providing sufficient safety cushion during cyclical downturns.
Where is the Next Stop: From Narrative Premium to Cash Flow Validation
At this current time point, judging Ethereum's long-term performance as a "tech growth stock" hinges not on how many new stories can be told, but on whether existing narratives can be transformed into quantifiable on-chain cash flows and user behaviors in the coming quarters. In the short term, the market's focus is likely to center on several key nodes: first, the actual improvement in L2 fees and mainnet congestion after subsequent protocol upgrades; second, whether the restaking and AVS tracks can provide clear solutions in terms of "regulatory compliance + risk control transparency"; third, whether high-heat tracks like AI and DePIN can produce truly sustainable paying users and business models. If two to three of these variables can be successfully realized, Ethereum's "tech growth" attribute will gradually shift from narrative premium to a valuation system supported by multi-dimensional cash flows such as fees, staking yields, and ecological project profit sharing. For funds, a more realistic strategy may not be to make a "this or that" bet between ETH and other public chains, but to acknowledge Ethereum's infrastructure status and use a combination of assets with different risk levels to hedge against fluctuations in technological routes, regulatory environments, and macro liquidity. As Ethereum transitions from a single narrative to a multi-track overlay, it has the potential to become the core carrier of this crypto tech cycle while also facing more complex valuation games and performance tests. This will be an underlying logic that all trading and allocation decisions surrounding ETH cannot avoid in the coming phase.
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