Author: Brayden Lindrea, CoinTelegraph; Compiler: Tao Zhu, Golden Finance
A research analyst at crypto asset management company 21Shares said that Wall Street investors are still largely unaware of the potential of Ethereum, just like Amazon in the early 1990s before it became a $2 trillion tech giant.
The spot Ethereum exchange-traded fund was launched in July, but inflows have been relatively small compared to spot Bitcoin ETFs.
Leena ElDeeb, research analyst at 21Shares, pointed out that only if the potential of Ethereum is understood will the ETH ETF see a large inflow of funds.
Ethereum is “complex and akin to Amazon in the 1990s — huge potential, but less straightforward use cases,” Eldeeb said.
Federico Brokate, vice president and head of U.S. operations at 21Shares, added that while Amazon started out as an online bookstore, “few could have predicted its transformation into a global e-commerce and cloud computing giant, reinventing the way we shop and use digital services.”
Similarly, Ethereum began as a platform to support basic smart contracts and now supports more than $140 billion worth of decentralized finance applications since its launch in 2015.
“Just as Amazon transcended books and redefined an entire industry, Ethereum could surprise us with revolutionary use cases that we can’t fully imagine today.”
While Ethereum’s $320 billion market cap is only 6.25% of Amazon’s $2 trillion valuation, Brokate noted that one advantage Ethereum had over Amazon in the 1990s was the large pool of talent dedicated to making the network useful.
“By the late 1990s, Amazon employed approximately 7,600 people. In contrast, the Ethereum network today has over 200,000 active developers — including software engineers, researchers, and protocol designers — all contributing to its growth,” Brokate said, adding:
“Amazon has grown to over 1.5 million employees worldwide, and we may see similar growth in the Ethereum ecosystem.”
Ethereum continues to dominate decentralized exchanges, lending, stablecoins, and real-world asset markets, despite challenges from Solana and other Layer-1 competitors.
BlackRock, the world’s largest asset manager, has tokenized more than $533 million worth of money market funds on Ethereum. More recently, UBS launched its own tokenized fund on November 1.
Source: Ryan Rasmussen
Payment companies PayPal and Visa are also developing on Ethereum.
However, "only a few investors understand the potential of Ethereum," and many choose to "wait and see" the spot Ethereum ETF for the time being, Brokate pointed out.
Short-term investors remain “cautious” and are reluctant to invest in spot Ethereum ETFs until Ethereum’s potential and use cases are “clearer,” ElDeeb added.
“[However] we remain optimistic that investor sentiment and adoption will follow a similar path of continued growth as the market matures and Ethereum’s diverse applications grow.”
Sygnum Bank head of research Katalin Tischhauser noted that, excluding Grayscale’s outflows, inflows into spot Ethereum ETFs were just 9% of those into spot Bitcoin ETFs in the first 90 days.
Tischhauser noted that this was largely expected, as investors were still “digesting” spot Bitcoin ETFs due to the short marketing period and the fact that staking is not permitted by U.S. securities regulators.
But Tischhauser said that in 12 months, investors will have more time to consider the bull case for Ethereum, and the situation may be "very different" by then.
Therefore, she is not concerned about the number of spot Ethereum ETF issuers that have recently continued to record "0" flows.
"It is too early to talk about delisting now, and traditional investors need time."
In the past few weeks, several spot Ethereum ETFs have recorded dozens of "0" flows. Source: Farside Investors
21Shares, one of eight U.S. spot Ethereum ETF issuers, has received $21.9 million in net inflows.
Tischhauser said the lack of institutional flows could be attributed to Ethereum’s Layer 2 scaling strategy, which is cannibalizing Ethereum mainnet revenue.
CK Zheng, chief investment officer at crypto hedge fund ZX Squared Capital, noted that the decline in Ethereum revenue could be off-putting to many Wall Street investors who like to implement cash flow analysis for valuation purposes.
But similar to Amazon’s losses for several consecutive quarters in the 1990s, Brokate isn’t concerned about Ethereum’s recent revenue woes because its Layer 2 scaling strategy is attracting millions of new customers at low cost.
Eventually, Layer 2 fees will become “large enough” to return Ethereum mainnet fees to pre-blob levels, Brokate said.
A scam targeting cryptocurrency investors in Hong Kong has led to losses of HK$14.8 million, with victims tricked into making transactions at fake exchange shops. One businessman lost HK$4 million after realizing he was locked inside a shop while scammers escaped with his money.
WeatherlyChina announced a "policy bazooka" on Tuesday, introducing measures to boost its economy, including cuts to mortgage rates, the reserve requirement ratio, and new stock market support tools. The key question: will this stimulus boost crypto or push interest towards cheaper fiat currencies?
CatherineLINE NEXT has launched “Super Mates,” an app that allows fans to interact with AI-driven avatars of their favorite artists in English, Korean, or Japanese. To celebrate, they’ve partnered with K-pop group aespa, offering exclusive rewards and merchandise while inviting users to engage in various activities until October 2024.
JoyAt the TOKEN 2049 Summit in Singapore, BONK, a meme coin under the US blue-chip public chain Solana, announced that it would launch an ETP and hinted that an ETF might be launched in the future. The token has skyrocketed by more than 8,788% in one year.
AlexA report by crypto analysis company Chainalysis shows that China's over-the-counter cryptocurrency transactions attracted $75 billion, and about 55% of over-the-counter cryptocurrency transactions exceeded $1 million.
MiyukiThe TUSD stablecoin has been decoupled from the US dollar in the short term, and the decentralized exchange Curve Finance has removed TUSD from its stablecoin crvUSD collateral. After BUSD encountered US regulation, Binance Exchange has stepped on the thunder for the second time and has stopped Launchpool support for TUSD.
WeiliangDonald Trump proposed that the U.S. national debt of $35 trillion could be eliminated with cryptocurrency, sparking laughter at a recent event and raising questions about his understanding of economic policy. His comments reflect a broader trend among political figures to simplify complex fiscal issues, highlighting a disconnect between rhetoric and reality in the discussion of national debt.
WeatherlyOnyx Protocol recently lost $3.8 million in a hack exploiting a known vulnerability in its forked Compound V2 code. Attackers targeted empty markets, echoing similar breaches in other Compound forks, highlighting ongoing security concerns in DeFi. This is not Onyx Protocol's first breach.
CatherineThai authorities arrested nine Vietnamese men for detaining a Thai woman and a Taiwanese man over a cryptocurrency dispute involving a 1.7 million baht debt. The suspects used violence against the Taiwanese man, threatening him and demanding payment, while police swiftly intervened after the man's family reported his abduction.
AnaisFollowing Hamster Kombat’s airdrop, many players expressed disappointment, feeling their in-game efforts as CEOs were poorly rewarded. The airdrop, deemed "dust," coincided with a 45% drop in HMSTR token value. Is the once-thriving tap-to-earn game all tapped out?
Kikyo