Could Ethereum Follow Amazon’s Path to Dominance?

A research analyst from 21Shares has drawn parallels between Ethereum’s current position and Amazon's in the early 1990s, suggesting that many Wall Street investors still underestimate Ethereum’s potential.

Since launching in July, Ethereum exchange-traded funds (ETFs) have not seen the same investment levels as Bitcoin ETFs. Leena ElDeeb, the analyst, noted that significant inflows into ETH ETFs will only occur once investors recognize its capabilities, highlighting Ethereum’s complexity akin to Amazon’s early days.

While Amazon evolved from an online bookstore into a global e-commerce leader, Ethereum, which started in 2015, now underpins over $140 billion in decentralized finance applications. Federico Brokate of 21Shares pointed out that despite Ethereum’s market cap of $320 billion being only a fraction of Amazon’s $2 trillion valuation, it benefits from a large community of over 200,000 active developers, a stark contrast to Amazon’s 7,600 employees in the 1990s.

Though facing competition from platforms like Solana, Ethereum continues to dominate decentralized exchanges and lending markets. Major players like BlackRock and UBS have already tokenized substantial amounts on the Ethereum network. However, Brokate mentioned that many investors remain hesitant to engage with spot Ether ETFs until they better understand 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 due to a brief marketing period and regulatory constraints. Katalin Tischhauser from Sygnum Bank believes the situation will improve over time as investor awareness grows. Meanwhile, 21Shares has captured $21.9 million in net inflows among the eight U.S. spot Ether ETF issuers.

The slow 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 ultimately attract millions of users and restore fee levels.

Alexander Stefanov