JPMorgan’s Nikolaos Panigirtzoglou doubled down on his bearish Ethereum call in his recent research note, claiming that its waning dominance in the non-fungible token sector could negatively affect extreme to the price of the Ether (ETH) token.
ETH is down 35.55% from its November peak of $4,878.
The analyst noted that blockchain dominance in the NFT market has dropped to 80%.
While Ethereum continues to gain the lead, it is being challenged by rival Solana.
If Ethereum continues to give way to rivals, Panigirtzoglou predicts that it will not bode well for crypto valuations:
If its NFT stock loss starts to be more sustained in 2022, that will become a bigger problem for Ethereum’s valuation.
Meanwhile, the OpenSea NFT market recently hit a valuation of $13.3 billion.
In December, $2.7 billion worth of NFT sales were recorded across various blockchains, with Ethereum making up the majority of them ($2.3 billion).
Too late to scale?
Naysayers believes that Ethereum will not be able to maintain its dominance as it has become too expensive to use for the average Joe due to increasing network congestion.
During his recent appearance on the Bankless podcast, co-founder Vitalik Buterin said that the second-largest blockchain is already halfway through reaching full optimization. Full of delays, Ethereum 2.0 has now been pushed back to mid-2022. The Beacon chain, which went live in December 2020, is expected to merge with the mainnet before June. Sharding, which is required to achieved a significant level of scalability, only expected to ship in early 2023.
Panigirtzoglou believes Ether may not scale fast enough to maintain its dominance in fast-growing market sectors like decentralized finance and NFTs.
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