Ethereum Losing Ground in NFT Market According to JPMorgan
In response to the high transaction costs on the Ethereum (ETH) network, JPMorgan’s clients have been informed that ETH is losing ground in the non-fungible token (NFT) market to other cryptocurrencies, such as Solana (SOL). According to JPMorgan, congestion and high gas costs have pushed non-transactional applications to other blockchains, which has resulted in a decrease in transactional apps.
A recent report from JPMorgan indicates that the value of ETH is falling in the NFT market. According to the bank, the value of ETH is dropping in the NFT market, and ETH’s standing is under threat from other cryptocurrencies. Research supplied to clients by JPMorgan Chase and Company earlier this week showed ETH is losing ground to alternative cryptocurrencies such as SOL in the NFT market.
In the opinion of JPMorgan specialists, headed by Nikolaos Panigirtzoglou, high gas costs and congestion on the ETH network have driven non-financial-transaction (NFT) apps to look for a new home elsewhere. According to the experts, ETH’s share of total NFT volume decreased from 95 percent at the start of 2021 to about 80 percent currently.
When comparing NFT apps to define applications, Panigirtzoglou came up with the following comparison: As shown with defi applications, high gas prices and congestion have pushed non-financial-transaction (NFT) applications to rely on other blockchains instead of their own.
According to their study, according to JPMorgan’s global markets team, the Solana network has eclipsed ETH as the most commonly traded cryptocurrency in recent weeks. The Solana network is a decentralized application development platform that uses blockchain technology to develop smart contracts and decentralized apps (dApps).
Currently, the price of Solana tokens is $0.59, whereas the price of ETH is $251 at the time of writing. The whole market capitalization of ETH was $28 billion, whereas the total market capitalization of Solana was $1.2 billion.
According to the experts, it is conceivable that the current trend will continue and that this could influence the price of ether. Currently, ETH is selling at $3,250.28 per coin, according to the most current Bitcoin.com Markets data available at this publication. Panigirtzoglou offered a rationale for his choice.
The NFT share losses for ETH may become more severe this year, causing the cryptocurrency’s value to decline. In this scenario, according to the experts, the price of ETH will hover between $1,000 and $2,000 for the foreseeable future.
Panigirtzoglou is not the only analyst who feels ETH’s NFT share has dropped due to the recent price decline. According to a survey published on April 5th by Bitcoinist, ETH’s market share in non-financial-transaction (NFT) applications has declined from 95 percent to 83 percent in three months. During the same period, the entire market volume for NFT applications decreased from $10 billion to $9 billion.
The decentralization of ETH was a critical component of its success. According to Panigirtzoglou, this is one of the reasons why other blockchain initiatives are attempting to use its technology rather than developing their own solutions from the ground up.
According to Panigirtzoglou, the current token distribution model for ETH is not sustainable, and it is no longer possible to attract new users to the network.
“I think we are in a transition phase where we will see an increase in different types of token and applications built on ETH. But there will also be an increase in attempts of centralization,” he said.
According to a JPMorgan analysis, nascent blockchains such as Solana, Wax, and Tezos are attracting new finance technology (NFT) developers because of their cheaper transaction costs compared to established blockchains. However, according to the JPMorgan analysis, ETH can dominate the industry.
To keep its position as a leader, ETH must integrate additional NFT capabilities, such as smart contracts for NFT assets and address ownership protection, to maintain its position as the leader. However, the expert expects that adopting decentralized apps would lead ETH’s NFT share to grow again in 2022, resulting in another increase in the NFT share.
Panigirtzoglou went on to say, “What do you think will happen in the next two years? I believe that additional apps will be developed on the platform, and more NFTs being built on top of it. As a result, I think that a healthy ecology, and a healthy ecosystem, is what will allow ETH to live and prosper.”
Many big financial organizations, including JPMorgan Chase and Morgan Stanley, have shown an interest in Solana’s potential as an investment. According to a report published on their website, Bank of America predicts that Solana will surpass ETH and replace it as the Visa of the digital asset ecosystem.
Well-known NFT projects such as CryptoKitties and 0x have already paved the way for a new wave of investment in NFTs. The latter has recently been listed on Coinbase Pro, which is an indication that it is growing in popularity. The market for NFTs is still relatively small, but the growth potential is enormous. According to some estimates, the market could be worth $1 trillion by 2024.