21Shares: Ethereum is like Amazon in the 90s

Ethereum (ETH) has been receiving a lot of criticism for a long time, which is of course mainly due to its disappointing price trend. While bitcoin managed to set a new price record in March this year, ethereum has not even come close to its all-time high.

But according to Swiss cryptocurrency investment firm 21Shares, all will be well for Ethereum once investors start to see its potential.

‘Ethereum can surprise just like Amazon’

Ethereum followed bitcoin in July with the launch of its own spot exchange-traded funds (ETFs) in the United States. But the funds have actually given critics extra fodder. After just over three months, there is a net outflow of almost half a billion dollars, while the bitcoin funds had already raised billions of dollars in capital and broken several records.

But according to Leena ElDeeb, research analyst at 21Shares, Ethereum ETFs will take off once investors start to understand the digital currency’s potential.

He compares Ethereum to Amazon in its early years. “Ethereum is complex, just like Amazon in the 90s, with promising potential but not easy-to-understand applications,” ElDeeb said.

Founded in 1994 by Jeff Bezos as an online bookstore, Amazon has grown into a global e-commerce and cloud computing giant. “At the time, few would have predicted that Amazon would completely revolutionize the way we shop and use digital services,” said Federico Brokate, vice president and head of 21Shares’ U.S. business.

“Just as Amazon has evolved from books to redefining entire industries, Ethereum can also surprise us with revolutionary applications that we cannot fully foresee today,” Brokate added.

It’s a matter of patience

Ethereum currently has a market cap of $320 billion, which is just 6.25% of Amazon’s $2 trillion valuation. However, Brokate emphasizes that Ethereum has a key advantage over Amazon in the 1990s: the large pool of talent committed to improving the network and making it usable.

“In the late 1990s, Amazon employed approximately 7,600 workers. In contrast, today the Ethereum network has more than 200,000 active developers, including software engineers, researchers and protocol designers, all contributing to its development,” Brokate said.

According to ElDeeb, it is important that investors gain more clarity about the potential and applications of Ethereum, just as Amazon gradually began to understand in the late 1990s and early 2000s. He seems to have every confidence in this:

“However, we remain optimistic that as the market matures and Ethereum’s diverse applications expand, investor sentiment and adoption will follow a similar growth path.”