When it comes to non-fungible tokens, JPMorgan analysts lead by Nikolaos Panigirtzoglou believe Ethereum ($ETH), the second-largest cryptocurrency by market capitalization, is losing market share to rivals like Solana ($SOL) (NFTs).
According to a note sent to clients and quoted by Business Insider, Ethereum’s volume share in non-fungible token trading decreased from 95 percent at the start of 2021 to 80 percent as a result of the cryptocurrency’s network’s high transaction fees.
“Congestion and expensive gas fees” have been “inducting NFT applications to use other blockchains,” according to the experts, just as they did with decentralized applications. Solana ($SOL) has been a big winner, according to the analysts, since it has been stealing market share from Ethereum.
“If the loss of its NFT share starts looking more sustained in 2022, that would become a bigger problem for ethereum’s valuation.”
Over the last year, the NFT market has surpassed $12 billion, with some collections fetching millions of dollars. NFTs are cryptoassets that are distinguished from one another by unique identifying codes and metadata. They cannot be traded as counterparts to BTC or ETH.
The average transaction cost on the Ethereum blockchain has topped $80 in some instances, driving smaller traders away from the network. Solana and other blockchains were designed with scalability in mind, allowing for a higher number of transactions per second.
Other networks, like as WAX and Tezos, are also gaining market share, according to JPMorgan’s analysts.
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