A few months ago, the US bank declared Ethereum extremely useful. In the meantime, this position has changed. JPMorgan warns of Ethereum.
A few months ago, the US bank declared Ethereum extremely useful. In the meantime, this position has changed. JPMorgan warns of Ethereum!
Ethereum is losing DeFi dominance
Nikolaos Panigirtzoglou is a crypto analyst at JPMorgan. Now he is making it clear that Ethereum is losing its previous dominance in the DeFi sector. In his opinion, there is a very specific reason for this.
Because Ethereum is simply too slow. And by that he doesn’t mean the speed of the transactions, but the project’s development. For many years, Ethereum always set the tone at dApps . That will soon be over.
Ether’s problems are obvious. On the one hand there is poor scalability, on the other hand the is high network charges. The solution to this is the long-awaited sharding in Ethereum 2.0.
Panigirtzoglou says a final, full version is not expected before 2023. According to the analyst, it will then be “too late”. The competition is currently developing too quickly. In addition, the scene is currently in a hot phase.
The data also support this position. In mid-January 2021, Ethereum was even able to regain shares in the market and dominated DeFi with over 97 percent. Today Ethereum’s share is only 63 percent. Bitcoin also experienced a similar development in terms of market dominance . BTC only has a 40 percent share of the entire market.
Terra (Luna) second-largest smart contract platform
Binance also recognized the potential of Ethereum and created the Binance Smart Chain. At the beginning of 2021, BSC achieved a share of over 21 percent, making it Ethereum’s worst competitor.
Since then, BSC has shrunk to 6.5 percent and is only in third place. The unexpected winner is Terra. Terra currently has a 7.5 percent market share and was even able to leave the newcomers Avalanche and Solana behind.
For Panigirtzoglou, this is a strong indication that Ethereum will continue to lose ground in the future. This year the course of the top dog will take a bad turn.
Ethereum is currently in second place among all cryptocurrencies. With a market capitalization of over $ 400 billion, Ethereum is half the size of Bitcoin but far ahead of all subsequent cryptos.
DefiLlama states that there are currently 388 different protocols on Ethereum. Just 15 different projects are running on Terra.
Is JPMorgan’s criticism of Ethereum inadequate?
Nikolaos Panigirtzoglou already expressed criticism of Ethereum in September. At the time, the coin was valued at around $ 3,000. Panigirtzoglou thought only half the price was reasonable. A value of 1,500 US dollars is clearly overrated.
In November, Ethereum hit its all-time high of more than $ 4,700. At the time, the analyst voiced the same criticism. The competition will “eat up Ethereum”. Despite falling market share, Ethereum was able to continue to grow and realize profits.
In April, colleagues from JP Morgan only stated that Ethereum was much more valuable than Bitcoin in practice. A corresponding tweet is now offline.