Ethereum as ‘Amazon in the 1990s’ – 21 shares

Wall Street investors did not realize the potential of Ethereum, similar to Amazon in the nineties, before it became a $21 trillion technology giant, according to a research analyst at crypto asset manager 21Shares.

Spot Ether (ETH) exchange-traded funds launched in July but have seen smaller returns compared to Bitcoin (BTC) ETFs.

Lena Eldib, a research analyst at 21Shares, tells Cointelegraph that a large migration into ETH ETFs will happen only after Ethereum's potential is realized.

Ethereum is a complex similar to Amazon in the 1990s — with huge potential but less simplistic use cases, Eldeeb said.

Although Amazon began as an online bookstore, “you could have predicted that it would evolve into a global e-commerce and cloud computing giant, shaping how we buy and consume digital services,” said Federico Brockett, vice president and head of America's business unit. . Added by 21Shares.

Similarly, Ethereum began as a platform supporting basic smart contracts, and now Since its launch in 2015, it supports decentralized financial applications valued at over $140 billion.

“Just as Amazon has evolved beyond books to redefine entire industries, Ethereum may surprise us with revolutionary use cases that we cannot fully imagine today.”

Ethereum's $320 billion market cap is only 6.25% of Amazon's $2 trillion valuation, but Brockett notes that one advantage Ethereum had over Amazon in the 1990s was the vast pool of talent working to make the network useful.

“In the late 1990s, Amazon employed 7,600 people. In contrast, the Ethereum network today has more than 200,000 active developers — including software engineers, researchers and protocol designers — all of whom contribute to its evolution, Brockett said.

“Amazon has grown to employ more than 1.5 million people worldwide – a growth we see paralleling in the Ethereum ecosystem.”

While Ethereum is challenged by Solana and other tier-1 competitors, it still dominates decentralized exchanges, lending and borrowing, stablecoins, and real-world asset markets.

BlackRock, the world's largest asset management firm, has listed over $533 million worth of money market funds on Ethereum. Recently, Swiss Confederation Bank launched its own token fund on November 1st.

Payment organizations PayPal and Visa are building on top of Ethereum.

However, “only a few investors realize the potential of Ethereum” and many have chosen to “stay on the sidelines” in holding Ether ETFs for the time being, Brockett noted.

Short-term investors are still “cautious” and less interested in investing in Ether ETFs until there is “more clarity” on Ethereum's potential and usage issues, LDB added.

“[However,] As the market matures and Ethereum's various applications continue to grow, we hope that investor sentiment and adoption will follow a path of continued growth.

Related: Ethereum ETFs would have been ‘better' if launched in January: Bitstamp exec

Kathleen Tischhauser, head of research at Sygnum Bank, said that in the first 90 days, Ether ETFs accounted for 9 percent of the space managed by Bitcoin ETFs, excluding grayscale flows.

This is largely expected due to the short trading period, investors are still “digesting” the position Bitcoin ETFs and the United States securities regulator does not allow registration, Tischhauser told Cointelegraph.

But the picture could look very “different” in 12 months, when investors have had more time to consider Ethereum's bull case, Tischhauser said.

For this reason, she is not concerned with the number of spot ether ETF issuers that have consistently reported slow “0” flows.

“It would be too soon to talk about delisting, traditional investors need time.”

21Shares is one of eight U.S. spot ether ETF issuers and has raised $21.9 million in net proceeds.

A lack of institutional flows could be eating into Ethereum's mainnet revenue from Ethereum's Layer 2 scaling strategy, Tischhauser said.

CK Zeng, chief investment officer of crypto hedge fund ZX Squared Capital, told Cointelegraph that Ethereum's declining revenue may not bode well for many Wall Street investors who like to apply cash flow analytics for valuation purposes.

But Amazon As it posted quarter after quarter of losses in the 1990s, Brokate isn't worried about Ethereum's recent revenue woes because its Layer 2 display strategy is attracting millions of new customers at low costs.

Eventually, payments from Layer 2 will be “enough” to bring Ethereum's mainnet fees back to the levels they were before the cryptocurrencies were introduced, Brockett said.

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