Global investment bank JPMorgan sent a note to clients this week explaining that Ethereum is losing ground to rival cryptocurrencies, such as Solana (SOL), in the market for NFTs, non-fungible tokens.
Among the main reasons, JPMorgan analysts mention network congestion and sky-high transaction fees on the network: “It appears that similar to defi applications, congestion and high gas fees have been inducing NFT applications to use other blockchains”
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Led by Nikolaos Panigirtzoglou, the investment bank’s experts noted that Ethereum’s NFT volume share has fallen from 95% in early 2021 to around 80% at the hands of “rival” cryptocurrencies such as SOL -Solana-.
Thus, JPMorgan’s global markets team discovered that the Solana network, in particular, has been taking market share from Ethereum in recent weeks and warned that if the trend continues, it could affect the price of ETH, which after Monday’s collapse is trading at USD 2,770.
According to the JPMorgan report, newer blockchains – such as Solana, Wax or Tezos – are attracting NFT developers with much lower transaction fees. If the loss of your NFT quota starts to look more sustained in 2022, that would become a bigger problem for the valuation of Ethereum.
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