The Ether ETFs ETH tickers down €2,272.40 were launched in July 2024, but they have recorded relatively modest inflows compared to the Bitcoin ETFs BTC tickers down €63,306. ElDeeb believes that significant flows into Ether ETFs will only occur when major investors truly understand the potential of this blockchain. "Ethereum is complex, similar to Amazon in the 1990s: its potential is vast, but its use cases are unclear," ElDeeb said.
Originally, Amazon was a simple online bookstore, but "few could have predicted that the company would transform into a global giant in e-commerce and cloud computing, reshaping the way we buy and use digital services," added Federico Brokate, Vice President & Head of the US Business Unit at 21Shares. Similarly, Ethereum was born in 2015 as a platform for smart contracts. Today, the blockchain supports numerous decentralized financial applications, with a total value of over 140 billion dollars.
Although Ethereum's current market cap (300 billion dollars) is only 15% of Amazon's valuation (2 trillion dollars), Brokate argues that blockchain has a significant advantage over Bezos's company in the 1990s: a vast pool of talent working tirelessly to make the network better and better. "At the end of the 1990s, Amazon employed about 7,600 people," Brokate said. "Today, the Ethereum network has over 200,000 active developers, including software engineers, researchers, and protocol designers, who contribute to its evolution." Amazon has grown to employ over 1.5 million people worldwide: we could witness similar growth in the Ethereum ecosystem as well."Despite the competition from Solana and other Layer-1 networks, Ethereum continues to dominate the world of decentralized exchanges, lending, stablecoins, and Real-World Assets markets."
Despite the competition from Solana and other Layer-1 networks, Ethereum continues to dominate the world of decentralized exchanges, lending, stablecoins, and Real-World Asset markets. BlackRock launched the BlackRock USD Institutional Digital Liquidity Fund on Ethereum, which recently surpassed a market cap of 500 million dollars. This month, the Union Bank of Switzerland also launched a tokenized fund on the blockchain. Even payment companies, such as PayPal and Visa, are working on Ethereum-based projects.
However, "few investors understand the true potential of Ethereum," many have chosen to "stay on the sidelines" and not invest in ETFs. "We remain optimistic that, with the maturation of the market and the growth of various Ethereum applications, investor sentiment and adoption will follow a path of sustained growth," added ElDeeb. In the first 90 days – excluding outflows from Grayscale – inflows into Ether spot ETFs were just 9% of those recorded by Bitcoin ETFs. These disappointing results are mostly attributed to the short marketing period, investors who are still "digesting" Bitcoin ETFs, and the fact that the U.S. regulator does not allow staking, Tischhauser said.
But the picture could look "very different" in 12 months, when investors will have had more time to study and understand Ethereum. For this reason, the analyst believes that weak inflows into ETFs should not discourage investors: "It's still too early to talk about delisting, traditional investors need time."