Analysts at global banking giant JPMorgan say that Ethereum (ETH) competitors will challenge the top altcoin’s decentralized finance (DeFi) dominance of the crypto markets this year.
In a recent report, analysts led by JPMorgan managing director Nikolaos Panigirtzoglou say that ETH’s 70% market share of the DeFi space will continue to drop because the blockchain’s sharding upgrade is still at least a year away.
[adinserter block="1"]Ethereum’s market share of the DeFi space is already down 30% since January 2021.
“In our mind, this optimistic view about ETH’s dominance is at risk.
This is because the scaling of the Ethereum network, which is necessary for the Ethereum network to maintain its dominance, might arrive too late.”
According to Panigirtzoglou, Ethereum competitors such as Terra (LUNA), Solana (SOL), Avalanche (AVAX), Fantom (FTM), Tron (TRX), layer-2 scaling solution Polygon (MATIC), and the Binance Smart Chain (BSC), powered by Binance Coin (BNB), are gaining ground on the second-largest crypto by market cap in terms of growth via adoption.
Furthermore, some developers may not ever return to ETH after its sharding upgrade is complete, according to the report.
“The relative valuation of Ethereum vs. its competitors has been echoing its declining DeFi share.
The risk for ETH is that by the time sharding is implemented in 2023, competitors’ ecosystems would have grown by so much that activity won’t return en masse to the Ethereum network.
In other words, Ethereum is currently in an intense race to maintain its dominance in the application space with the outcome of that race far from given, in our opinion.”
Ethereum is exchanging hands at $3,111 at time of writing, a 30% decrease from its 30-day high of $4,439.
Follow us on X, Facebook and TelegramDon't Miss a Beat – Subscribe to get email alerts delivered directly to your inbox
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any assets including cryptocurrencies, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/MIRCO EMMY/Nikelser Kate/karnoff
