Investment bank Jefferies has released a comprehensive report for institutional investors comparing the current cryptocurrency market to the internet era of 1996, suggesting the sector is still in its early growth phase with significant potential ahead. The bank, which launched full coverage of digital assets in September 2024, reports strong and diverse client interest, with many investors asking if they're "too late to invest."
Analysts led by Andrew Moss responded that "relative to the internet, it's 1996 for the digital asset ecosystem, and the next leg of growth has just begun." The report draws specific parallels to Wall Street during the early internet days when Netscape Navigator battled Internet Explorer, Amazon was a fledgling online bookstore, and Google didn't yet exist.
Jefferies argues that excessive focus on Bitcoin prices distracts from blockchain technology's disruptive potential across industries. The bank notes that only a handful of traditional funds currently have crypto exposure, but this is changing rapidly as institutions develop investment strategies across tokens, ETFs, digital asset treasury companies (DATs), and public companies with crypto exposure.
The report identifies two major growth catalysts: ETFs and DATs could drive short-term demand by removing institutional barriers, while tokenization and IPOs represent long-term opportunities. Jefferies expects 10-15 crypto-related IPOs over the next 18-24 months and predicts a $1 trillion public market sector within five years, encompassing distributed ledger developers, tokenization platforms, custodians, stablecoin issuers, and analytics companies.
The bank advises investors to apply lessons from the dot-com era: be selective and focus on lasting utility rather than speculative assets. Only six of the top 20 tokens from January 2018 remain in the top 20 today, mirroring the displacement of early internet leaders like AltaVista and Lycos. Jefferies recommends analyzing tokens like early-stage tech startups, prioritizing adoption, development, usage, and use cases over fleeting revenue spikes.