Following the launch of Ethereum spot ETFs, investor reaction has been lukewarm, and the price of Ethereum has not seen significant improvement. However, 21Shares, one of the eight U.S. issuers of Ethereum spot ETFs, stated today that investors largely remain unaware of Ethereum’s potential, comparing it to Amazon in the early 1990s.
(Background:
The Ethereum Foundation was scared by FUD! A researcher abandoned their advisory position at EigenLayer.
Additional Context:
Analyzing six reasons for Ethereum’s stagnation: upgrade surprises, ETF disappointment, failure to catch the trend…)
The first batch of Ethereum spot ETFs in the U.S. was launched in July, but compared to Bitcoin spot ETFs, they have attracted relatively less capital, and the price of Ethereum has not improved recently. Leena ElDeeb, a research analyst at the cryptocurrency asset management firm 21Shares, analyzed today that significant capital would flow into Ethereum spot ETFs only when Ethereum’s potential is understood:
Federico Brokate, Vice President and head of U.S. business at 21Shares, added that Amazon initially was an online bookstore, and few could have predicted it would transform into a global e-commerce and cloud computing giant, reshaping how people shop and use digital services. Similarly, Ethereum started as a platform supporting basic smart contracts. Since its launch in 2015, it now supports over $140 billion in decentralized finance applications:
Although Ethereum’s current market capitalization of $320 billion only accounts for 6.25% of Amazon’s $2 trillion valuation, Federico Brokate pointed out that, unlike Amazon in the 1990s, Ethereum has the advantage of a massive talent pool dedicated to making the internet useful:
Ethereum’s Future Potential Remains Huge
Despite challenges from Solana and other L1 competitors, Ethereum continues to dominate the DEX, lending, stablecoin, and RWA markets. BlackRock has tokenized over $533 million of money market funds on Ethereum, and UBS recently launched a tokenized fund on Ethereum, with PayPal and Visa also developing on the platform.
Federico Brokate stated that only a minority of investors understand Ethereum’s potential, and many choose to wait and see with Ethereum spot ETFs. Leena ElDeeb added that short-term investors remain cautious, unwilling to invest in Ethereum spot ETFs until the potential and use cases of Ethereum become clearer:
Although the recent rise of Ethereum L2 has led to a decrease in mainnet revenue, Federico Brokate is not worried, comparing it to Amazon’s consecutive quarters of losses in the 1990s. He believes Ethereum’s L2 scaling strategy is attracting millions of new users at low cost, and eventually, the fees collected by L2 will become “sufficiently large” to restore Ethereum mainnet revenue to pre-Dencun upgrade levels.
Extended Reading:
VanEck: Continuous “bleeding of Ethereum” by L2 could severely impact ETH, making a target price of ten thousand challenging
?Related Reports?
A heavy loss! ETH/BTC whales “liquidate millions of dollars in debt” When will Ethereum bounce back?
UBS launches its first tokenized fund “on-chain with Ethereum”, what is the reason for TradFi choosing ETH?
Opinion: What exactly caused Ethereum (ETH) to lose its vitality?