According to Morgan Stanley Wealth Management, Ethereum presently has the largest market share in the decentralised finance (DeFi) and non-fungible token (NFT) sectors. Analysts believe that Ethereum’s supremacy will fade as new competitors emerge.
Ethereum’s dominance may diminish
Morgan Stanley recently issued a report on Ethereum, highlighting that the blockchain’s supremacy might be challenged if strong market competition develops. It’s mentioned in the report that Ethereum has more competition threats, scalability problems, and complexity issues than Bitcoin, which has fewer.
Ethereum’s dominance may be challenged if the network faces more competition in the smart contract industry than Bitcoin does in the store-if-value market. According to Morgan Stanley, Ethereum may lose market share to faster and cheaper options for smart contract platforms. Morgan Stanley also said that Ether is a more risky investment than Bitcoin because BTC only needs a few transactions from each user.
Ethereum’s demand is linked to transactions, so the network’s capacity limits may have more of an impact on the price than on the demand for Bitcoin, which is not linked to transactions at all.
As a result, there may be less demand for Ethereum transactions in the future because of tighter regulations in the DeFi and NFT sectors. The report also highlighted that Ethereum is less decentralised than Bitcoin, with the top 100 addresses controlling 39% of the ETH, compared to 14% for Bitcoin.