JPMorgan informed its clients that the high transaction fees and ethereum’s loss of ground in the NFT market are causing ethereum to lose ground to other cryptocurrencies such as Solana (SOL). “It looks like, similar to defi apps, congestion and high gas fees has been inducing NFT applications to use other blockchains,” said JPMorgan.
JPMorgan Says Ethereum is losing ground on the NFT Market
JPMorgan, the global investment bank sent out a note last week to its clients explaining that ethereum has lost ground to rival cryptocurrencies such as Solana (SOL), and NFT (non-fungible token) markets.
JPMorgan’s analysts, led by Nikolaos Panigirtzoglou, detailed that high gas fees and congestion have pushed NFT apps away from the Ethereum network. The analysts noted that Ethereum’s NFT volume share has fallen from 95% at the start of 2021 to around 80%.
Panigirtzoglou made the following comparison between NFT and decentralized finance apps (defi),
This is similar to what happened with defi apps. Congestion and high gas prices have prompted NFT applications using other blockchains to be used.
JPMorgan’s global markets team found that the Solana network in particular has been seizing market share from ethereum in recent weeks.
The analysts warned that if the trend continues, it could impact ethereum’s price. Based on data from Bitcoin.com Markets, the current price for Ethereum is $3,250.28 at the time of writing Panigirtzoglou elaborated on:
If the loss of its NFT share starts looking more sustained in 2022, that would become a bigger problem for ethereum’s valuation.
Newer blockchains — such as Solana, Wax, or Tezos — are attracting NFT developers with much lower transaction fees, the JPMorgan report notes.
JPMorgan, however, is not the only investment bank to recognize potential in solana. Bank of America last week stated that solana might take over market share from Ethereum and be the Visa of the digital ecosystem.
Do you agree with JPMorgan’s analysts regarding ethereum losing market share in the NFT market and solana gaining ground? Comment below to let us know your thoughts.
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