A research analyst from 21Shares has drawn comparisons between Ethereum’s current standing and Amazon’s position in the early 1990s, implying that many Wall Street investors are still undervaluing Ethereum’s potential.
Since its launch in July, Ethereum exchange-traded funds (ETFs) have not garnered the same level of investment as Bitcoin ETFs. Leena ElDeeb, the analyst, suggested that substantial inflows into ETH ETFs will only materialize when investors recognize its capabilities, underlining the complexity of Ethereum akin to Amazon’s initial phase.
While Amazon evolved from an online bookstore to a global e-commerce titan, Ethereum, which was established in 2015, now supports over $140 billion in decentralized finance applications. Federico Brokate of 21Shares noted that even though Ethereum’s market cap of $320 billion is only a fraction of Amazon’s $2 trillion valuation, it boasts a large community of over 200,000 active developers, a stark contrast to Amazon’s 7,600 employees in the 1990s.
Despite facing competition from platforms like Solana, Ethereum continues to reign supreme in decentralized exchanges and lending markets. Major players like BlackRock and UBS have already tokenized substantial amounts on the Ethereum network. However, Brokate indicated that many investors remain reluctant to engage with spot Ether ETFs until they fully comprehend Ethereum’s potential.
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Inflows into spot Ether ETFs have reached just 9% of Bitcoin’s during the first 90 days, primarily attributable to a short marketing period and regulatory constraints. Katalin Tischhauser from Sygnum Bank believes the situation will improve over time as investor awareness increases. In the meantime, 21Shares has captured $21.9 million in net inflows among the eight U.S. spot Ether ETF issuers.
The sluggish institutional interest may stem from Ethereum’s layer-2 scaling approach, which has impacted mainnet revenue. Despite concerns about declining revenues, Brokate remains optimistic, noting that Ethereum’s strategies could eventually attract millions of users and restore fee levels.
