Rethinking Ethereum's Value: Is it the Next Amazon?
Haseeb Qureshi, managing partner at Dragonfly, is challenging conventional wisdom surrounding Ethereum's valuation. He posits that current market analyses are fundamentally flawed, urging investors to view the world's second-largest blockchain not as a mature "value" stock, but rather through the lens of an early-stage growth company, much like Amazon in its nascent years.
Redefining Blockchain Valuation Metrics
Qureshi asserts that the financial framework traditionally applied to corporations misrepresents the true economics of Layer 1 (L1) blockchains like Ethereum. Critiquing the use of price-to-sales (P/S) ratios, he argues that the fees generated on Ethereum should be classified as pure profit, not merely revenue. Unlike traditional companies burdened by operational costs such as AWS hosting, a blockchain incurs no such expenses, rendering its fee income effectively net profit. He highlights that while critics point to Ethereum's high P/S of 300-380 compared to Amazon's peak P/S of 42 during its dot-com bubble, this comparison is misguided. Instead, Qureshi suggests comparing Ethereum's "profit" (from fees) to Amazon’s historical price-to-earnings (P/E) ratios. He notes that Amazon operated for nearly two decades with minimal or no profit, yet commanded P/E ratios exceeding 600 in 2013, akin to Ethereum's current "P/E" based on its robust fee generation. This analogy underscores a critical distinction: Ethereum, and other L1s, are still in an exponential "build-out" phase. They are infrastructural titans, evolving rapidly and gobbling up the financial world, much like early internet or e-commerce platforms, rather than stable, late-cycle dividend payers. To evaluate them as such overlooks their immense growth potential and the revolutionary nature of the technology they underpin.
Unwavering Conviction Amidst Volatility
Despite the choppy price action and recent underperformance of altcoins relative to AI equities and gold, Qureshi's conviction in Ethereum's long-term thesis remains unshaken. He contends that short-term market swings are merely "the pendulum of sentiment moving around a still-fixed fundamental anchor." A genuine re-evaluation of Ethereum's potential, in his view, would only be necessitated by a catastrophic event, such as a quantum cryptographic breach or a structural collapse in on-chain stablecoin demand. Without such fundamental shifts, he sees little justification for a major portfolio rethink. Qureshi's message to skeptics is clear: dismissing Ethereum at roughly 300-380x earnings on a "too high P/S" argument is analytically inconsistent, especially given the historical market tolerance for Amazon's similarly high P/E during its scaling phase. Ethereum currently trades at around $3,325, with ongoing debates reflecting its dynamic position in the global financial landscape.
