After the launch of the Ethereum spot ETF, investor response was lukewarm, and the price of Ethereum did not show significant improvement. However, 21Shares, one of the eight Ethereum spot ETF issuers in the United States, stated today that investors have largely not yet realized the potential of Ethereum, akin to Amazon in the early 1990s.
(Background:
The Ethereum Foundation was scared by FUD! A researcher abandoned their position as an advisor to EigenLayer.
Additional Background:
Analyzing the 6 major reasons for Ethereum’s stagnation: upgrade mishaps, ETF disappointment, failure to catch the hype…)
The first batch of Ethereum spot ETFs in the United States was launched in July, but compared to Bitcoin spot ETFs, the inflow of funds was relatively low, and the price of Ethereum has not improved recently. Leena ElDeeb, a research analyst at the cryptocurrency asset management company 21Shares, analyzed today that a significant inflow of funds into Ethereum spot ETFs will only occur once Ethereum’s potential is understood:
Federico Brokate, Vice President and Head of US Business at 21Shares, further explained that Amazon was initially an online bookstore, and few could have predicted that it would later transform into a global e-commerce and cloud computing giant, reshaping how people shop and use digital services. Similarly, Ethereum was initially a platform supporting basic smart contracts and, since its launch in 2015, 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 one advantage Ethereum has over Amazon in the 1990s is the vast amount of talent dedicated to making the internet useful:
Ethereum’s Potential Remains Huge
Despite facing challenges from Solana and other L1 competitors, Ethereum still dominates the DEX, lending, stablecoin, and RWA markets. BlackRock has tokenized over $533 million in money market funds on Ethereum, UBS recently launched a tokenized fund on Ethereum, and PayPal and Visa are also developing on Ethereum.
Federico Brokate stated that only a few investors understand the potential of Ethereum, and many choose to wait and see regarding the Ethereum spot ETF. 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, suggesting this is similar to Amazon experiencing losses for several quarters in the 1990s. He believes that Ethereum’s L2 scaling strategy is attracting millions of new users at a 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: L2’s continuous “draining of Ethereum” will significantly impact ETH, making the price target difficult to achieve
?Related Reports?
A huge loss! After “cutting losses of millions of dollars in debt,” when will Ethereum (ETH/BTC) whales rebound?
UBS launches its first tokenized fund “on-chain Ethereum,” what is the reason behind TradFi’s choice of ETH?
Opinion: What exactly caused Ethereum (ETH) to lose its vitality?