Cryptocurrency markets are currently experiencing a phase comparable to the early internet boom of 1996, according to Jefferies analysts in a recent client Q&A report. The investment bank, which initiated full coverage of digital assets in September, reports strong institutional interest with one recurring question: "Am I too late to invest?"
Analyst Andrew Moss and his team respond by drawing parallels to the internet's early growth stage, suggesting digital assets are just beginning their major expansion phase. They reference 1996 as a pivotal period when internet companies like Amazon were emerging, indicating similar potential for crypto.
Jefferies emphasizes that institutional adoption remains in early stages, with few traditional funds currently exposed to crypto. However, this is rapidly changing as institutions develop investment strategies across tokens, ETFs, and digital asset treasury companies (DATs).
Beyond Bitcoin Investment Opportunities
Analysts advise looking beyond Bitcoin (BTC) and its original payment use case. "Excessive focus on BTC price may distract from blockchain's disruptive potential across industries," the report states. Institutional investors are considering ETFs and DAT companies for exposure, which could drive short-term bullish momentum.
$1 Trillion Market Projection
Jefferies identifies long-term bullish catalysts including tokenization and IPOs. Asset tokenization enables 24/7 trading and real-time settlement, potentially creating "a paradigm shift" in blockchain activity and tokenholder value.
The bank anticipates 10-15 crypto IPOs within 18-24 months, projecting a $1 trillion public market sector within five years. Potential candidates include distributed ledger developers, tokenization platforms, custodians, and stablecoin issuers.
Investment Strategy Guidance
Echoing dot-com era lessons, Jefferies recommends selective investment focusing on lasting utility. They note that only 6 of January 2018's top 20 tokens remain top performers today, suggesting capital will shift from speculative assets to tokens with real applications.
The analysis concludes that investors should evaluate tokens like early-stage tech startups, prioritizing adoption, development, and use cases over temporary revenue spikes.