Ethereum Is “Akin To Amazon In The 1990s,” Has Vast Potential, 21Shares Says

Updated: 04 November 2024

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Fund manager 21Shares say the investment potential of Ethereum is similar to that of the $2 trillion tech giant Amazon back in the 1990s.

Ethereum is “complex, akin to Amazon in the 1990s — promising vast potential but less straightforward in its use cases,” said 21Shares research analyst Leena Eldeeb in an interview with CoinTelegraph.

Ethereum May Surprise Investors With New Innovative Use Cases

Reflecting on Amazon’s early days, vice president and head of 21Shares’ business unit, Frederico Brokate, said few people could have predicted that Amazon would transition from an online book store to “a global e-commerce and cloud computing giant.”

Similarly, the analysts believe that Ethereum could one day surprise investors with new “revolutionary use cases” that have not yet been discovered.

In terms of talent, Ethereum boasts a much larger pool of people currently working to make the blockchain better, noted Brokate. “By the end of the 1990s, Amazon employed around 7,600 people. In contrast, the Ethereum network today features over 200,000 active developers,” Brokate said.

BlackRock Already Using Ethereum To Tokenize Assets

DefiLlama data shows that Ethereum currently has over $47.7 billion in assets locked on its network. In addition to this, leading asset manager BlackRock has already tokenized more than half a billion dollars worth of money market funds on Ethereum.

More recently, the Union Bank of Switzerland also rolled out its own tokenized fund on the blockchain on Nov. 1.

If Ethereum is dead, then why are the world’s largest financial institutions launching products on it?

– Blackrock
– Franklin Templeton
– UBS… pic.twitter.com/KI9LIAFZ1I

— Ryan Rasmussen (@RasterlyRock) November 2, 2024

Despite this growing institutional adoption, spot Ethereum ETFs (exchange-traded funds) have struggled to gain traction since their launch earlier this year. Collectively, the new US funds have registered $478.9 million in outflows.

21Shares, which has $3.5 billion in assets under management, attributed the weak performance to “cautious” investors who are waiting on the sidelines until there’s “greater clarity” around Ethereum’s use cases.

Despite the cautious stance taken by investors, the 21Shares analysts “remain optimistic that as the market matures and Ethereum’s diverse applications grow, investor sentiment and adoption will follow a similar path of sustained growth.”