A crypto research analyst from 21Shares has drawn an intriguing parallel between Ethereum and Amazon in its early days. According to this comparison, just as Wall Street initially overlooked Amazon’s transformative potential in the 1990s, investors today may be underestimating Ethereum’s long-term value.
While spot Ether exchange-traded funds (ETFs) launched in July, they’ve garnered less interest compared to their Bitcoin counterparts. Leena ElDeeb, a research analyst at 21Shares, believes this is likely due to a lack of awareness about Ethereum’s unique advantages. ElDeeb describes Ethereum as “complex,” similar to Amazon when it was merely an online bookstore with vast, yet unrealized potential.
Federico Brokate, vice president of 21Shares’ U.S. division, expanded on this comparison, recalling how Amazon evolved into an e-commerce and cloud giant, reshaping digital services. Ethereum, which began as a platform for basic smart contracts, has similarly grown to support a wide range of decentralized finance (DeFi) applications valued at over $140 billion. Brokate speculates that Ethereum could one day introduce new, revolutionary applications that go beyond what we can currently imagine.
Ethereum’s current market capitalization is around $320 billion, or about 6.25% of Amazon’s valuation. However, Brokate points to the advantage Ethereum has today: a large talent pool of over 200,000 developers working to enhance its ecosystem. By comparison, Amazon employed just 7,600 people at the close of the 1990s. Brokate suggests that Ethereum’s developer base could mirror Amazon’s workforce growth, which now stands at over 1.5 million globally.
Despite competition from layer-1 alternatives like Solana, Ethereum remains a dominant player in DeFi, encompassing decentralized exchanges, lending platforms, and real-world asset tokenization. Major financial players like BlackRock, PayPal, and Visa have chosen Ethereum as a foundational blockchain, with initiatives like BlackRock’s $533 million in tokenized assets and UBS’s recent fund rollout on Ethereum further validating its importance.
However, Brokate notes that only a small segment of investors currently recognize Ethereum’s potential, leading to hesitant inflows in Ether ETFs. ElDeeb believes that short-term investors may wait for more clarity on Ethereum’s use cases before diving in, although she remains optimistic that as the market matures, demand will rise along with Ethereum’s varied applications.
In fact, according to Katalin Tischhauser, head of research at Sygnum Bank, Ether ETF inflows amounted to just 9% of those for Bitcoin ETFs during their first 90 days, which was anticipated. Factors such as limited marketing time, investor focus on Bitcoin ETFs, and regulatory restrictions around staking all contribute to this slower adoption. Tischhauser sees this cautious start as temporary, expecting a potential shift in sentiment over the next year as Ethereum’s investment case becomes clearer.
21Shares, one of the eight U.S.-listed Ether ETF issuers, has seen $21.9 million in net inflows. But Tischhauser highlights a potential roadblock: Ethereum’s layer-2 scaling solutions are drawing activity away from its mainnet, affecting revenue and perhaps deterring cash flow-focused Wall Street investors.
Still, Brokate is unconcerned about Ethereum’s current revenue dips. He views layer-2 solutions as a necessary strategy to bring in millions of new users at a low cost, predicting that mainnet fees will recover as layer-2 adoption grows and scaling solutions mature. For Ethereum, the future may hold a similar trajectory to Amazon’s: gradual growth followed by industry-defining impact.
“I don’t think it really matters. Everything is going up now. The election will pass,” Tapiero stated during a panel discussion at the Permissionless conference in Salt Lake City, Utah.
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