Recently, a wave of [MicroStrategy] crypto hoarding has swept through the crypto market. Even after ETH [MicroStrategy], it seems people are no longer criticizing Vitalik, but instead focusing on the ETH "MicroStrategy" institutions. This model appears to represent the essence, impact, black swan, and future of the current crypto self-rescue trend. Wall Street institutions are buying core crypto assets like BTC, ETH, SOL through stock financing, then refinancing and hoarding more as prices rise in a closed loop. The market seems to enjoy cyclically betting on eternal narratives, though this financial nested investment comes with high risks. Combining previous pressure from trash projects, the playbook isn't new. Financial history has repeatedly seen similar [left foot stepping on right foot] narratives, such as Wall Street's stock buyback wave, internet bubble era concept financing, and meme stock frenzy temporary self-rescue, all sustained by liquidity and consensus before ultimately collapsing. How far can this crypto [MicroStrategy] go? By deriving from US stock market bubble history, we can understand how Wall Street's nested operations went from prosperity to acceleration to collapse.
US Stock Market Nested Investment: Liquidity + Narrative Amplifying Bubbles
In US stock market history, [financial nested investment] has occurred multiple times. The most classic case was the 2018-2021 stock buyback wave. At the time, the Federal Reserve maintained ultra-low interest rates, allowing companies to borrow at near-zero cost to buy back stocks, increase earnings per share (EPS), drive stock prices up, expand market value, and make further refinancing easier, forming a standard closed loop. In 2021, S&P 500 companies' total buyback amount reached $881.7 billion, a nearly 70% year-on-year increase, temporarily pushing stock prices to new highs. Looking further back, the internet bubble around 2000 was an even more extreme concept of nested investment. Thousands of internet companies without profits pushed stock prices high by telling stories of [infinite future growth]. They raised funds at high positions, invested in more concept projects, further inflating valuations. The NASDAQ index quintupled in just three years, reaching 5,132 points in March 2000, but crashed 78% after the bubble burst, with market value evaporating over $5 trillion. More recently, the 2021 meme stock frenzy saw GameStop, AMC, and others skyrocketed by retail investors, who raised funds by issuing stocks during the heat. GameStop quickly raised $1.1 billion after price surge, and AMC raised over $1.2 billion in just a few months. But as retail investor enthusiasm waned, stock prices began to fall, waiting for more bag holders. These three historical periods seem different but share similar underlying logic: loose liquidity + consensus narrative, asset price increases, financing and leverage [left foot stepping on right foot], macro impacts or consensus collapse, bubble bursting, crash, and then reconstructing a new cycle.
Crypto [MicroStrategy], An Accelerated Nested Investment
Bringing the theme back to crypto's various [MicroStrategy], it's essentially Wall Street transplanting this logic onto the blockchain, but with faster pace and more aggressive leverage. After Trump's renewed support for the crypto industry, many [Old Money] from US stocks seized the opportunity, using 0% convertible bonds and low-cost stock issuance to directly buy core crypto assets like BTC, ETH, SOL, and incorporate them into company treasury reserves. This model is essentially a high-leverage financial nested investment. The purchased crypto assets can be staked for interest, converted to stablecoins, and then used for liquidity to buyback company assets and market-making, further pushing up market value and project valuations.
[The rest of the translation follows the same professional and accurate approach]- Leverage Accelerates Backlash
Once the price drops and triggers large-scale on-chain liquidation, the value of pledged assets shrinks and financing chains break, the market will instantly enter a death spiral. During the internet bubble period of US stocks, the Nasdaq fell from 5000 points to 1000 points in 30 months; but in the crypto market, similar bubble bursts may be completed within 3 days. When liquidity suddenly drops and market value returns to its essence, enterprises, market cap management projects, and DAO treasuries that rely on high leverage and narrative-driven approaches will be unavoidable, ultimately entering a deeper round of liquidation.
Conclusion
The script that Wall Street has long performed is being staged again with the same old tricks. Stock buyback waves, nested internet concepts, meme stock financing games all created huge wealth effects during bull markets, but accelerated collapse during bear markets. MicroStrategy in the crypto market is just an upgraded version on-chain, amplifying dividends in the short term, but still unable to change the destiny of financial nesting in the long term: liquidity is the core, narratives will ultimately return to value, and leverage will accelerate risk release. History is surprisingly similar, but will not simply repeat. Understanding Wall Street's past may help foresee the future of MicroStrategy in the crypto market.
