Ethereum, much like Amazon in its nascent stages, is still not fully understood by Wall Street investors, according to Leena ElDeeb, a research analyst at crypto asset manager 21Shares. During an interview, ElDeeb noted Ethereum’s potential to evolve far beyond its current use cases, drawing a parallel with Amazon’s early days when it was solely an online bookstore, far from the tech behemoth it is today.
Despite the launch of spot Ether ETFs in July, inflows have been relatively modest, especially when compared to spot Bitcoin ETFs. ElDeeb suggests that investor apprehension might stem from Ethereum’s complexity, as understanding its layered functionalities requires more than a superficial glance. For Ethereum to gain traction, ElDeeb believes investors need to recognize the platform’s potential to revolutionize finance, just as Amazon reshaped retail and cloud services.
Ethereum’s Unique Growth Trajectory
Unlike Amazon in the 1990s, which employed a few thousand people, Ethereum benefits from a vast ecosystem of over 200,000 developers. Federico Brokate, vice president of 21Shares’ U.S. division, noted this as a major advantage, emphasizing the global talent fueling Ethereum’s continuous growth. Ethereum currently underpins more than $140 billion in decentralized finance (DeFi) applications, including stablecoins and real-world asset markets.
Despite competition from other layer-1 platforms like Solana, Ethereum remains a leading player in DeFi and digital asset markets. Major corporations, including BlackRock, UBS, PayPal, and Visa, have recognized Ethereum’s value, integrating it into their payment and tokenization systems. However, Brokate points out that many institutional investors still remain on the sidelines. They are cautious, waiting for greater clarity around Ethereum’s long-term trajectory before diving into spot Ether ETFs.
Ether ETF Inflows
In the short term, inflows into Ether ETFs have been a fraction of those seen in Bitcoin ETFs. Katalin Tischhauser, Head of Research at Sygnum Bank, attributes this to the brief marketing period and ongoing inflows into Bitcoin ETFs. She believes that traditional investors simply need more time to understand Ethereum’s intricate bull case. Tischhauser is optimistic that a clearer view of Ethereum’s unique value proposition will attract traditional investors, predicting a very different inflow picture within a year.
Notably, as per the data by SoSoValue, Ether ETFs have recorded a net outflow of $491 million since their late-July launch.
The post Ethereum Echoes Amazon’s Early Days, Says 21Shares Analyst appeared first on TheCoinrise.com.
