Wall Street giant JP Morgan analysts Etherum He said that his effectiveness in the NFT sector is declining.
In its latest research report, JPMorgan’s analyst group led by Nikolaos Panigirtzoglou stated that NFT applications and artists are moving away from the Ethereum network due to high transaction fees in the ETH network.
Stating that Ethereum’s dominance in the NFT market has decreased from 95% to 80%, analysts emphasized that this may negatively affect the price of Ethereum.
Referring to the fact that Ethereum is at risk of losing its dominance in the DeFi space in early January, Nikolaos Panigirtzoglou said:
“Similar to DeFi implementations, congestion and high transaction fees seem to push NFT implementations away from Ethereum to use other blockchains.”
Stating that blockchains that offer lower transaction fees are competitors to Ethereum, JP Morgan analysts stated that especially the Solana network has gained a share of Etherum’s NFT market dominance in recent weeks.
Other than Solana, networks such as wax or tezos are also struggling to get a share of the NFT market, analysts said.
Panigirtzoglou stated that if Ethereum continues like this, it will not bode well for its valuation.
“If the loss of NFT market share continues into 2022, this will become a bigger issue for Ethereum’s valuation.”
It involves breaking down Ethereum blocks into smaller and more manageable segments. Ethereum Stating that the 2.0 update may probably reach the final stage in 2023, JP Morgan analysts stated that this will mean that Ethereum’s dominance in both DeFi and NFT markets will decrease.
*Not investment advice.