Sarah Tran
Independent Analyst
- Morgan Stanley recently argued that Ethereum’s dominance could diminish as strong competitors emerge.
- Ethereum further faces competitive threats, scalability issues and complex challenges compared to Bitcoin.
- The investment bank believes that Ether could become more volatile than Bitcoin.
Morgan Stanley Wealth Management recently noted that Ethereum currently takes lead in market share in the decentralized finance (DeFi) and non-fungible token (NFT) sectors. However, analysts believe that Ethereum’s dominance could dwindle as competitors emerge.
Ethereum dominance may diminish
Morgan Stanley recently published a report on Ethereum, highlighting that the blockchain could lose its dominance if strong market competition turns up.
According to the report, Ethereum faces more competitive threats, scalability issues and complexity challenges than Bitcoin. The firm further stated that Ether is more volatile than Bitcoin.
Ethereum may lose its dominance as the network faces more competition in the smart contract market than Bitcoin faces in the store-if-value market. Morgan Stanley stated that Ethereum may lose smart contract platform market share to faster and cheaper alternatives.
Morgan Stanley further suggested that Ether poses a bigger investment risk compared to Bitcoin as fewer transactions per user are needed to utilize BTC.
However, Ethereum demand is tied closely to transactions, therefore, the network’s scaling limitations could hurt the demand for ETH more than Bitcoin demand.
In addition, the regulatory status of the DeFi and NFT sector may see stricter oversight in the future, which could reduce demand for Ethereum transactions.
According to Morgan Stanley, Ethereum is less decentralized than Bitcoin, with the top 100 addresses holding 39% of ETH, compared to 14% for BTC.
On a positive note, Morgan Stanley’s report highlighted that Ethereum has greater market potential than Bitcoin, noting its deflationary system through its transaction-based burning mechanism.
Once ETH transitions to a proof-of-stake consensus mechanism, the Ethereum network’s performance could improve significantly.
Ethereum price tests crucial support
Ethereum price has formed a rising wedge pattern on the 12-hour chart, suggesting that ETH is at risk of facing pullback.
ETH has dropped toward the lower boundary of the governing technical pattern at $2,883, coinciding with the 50 twelve-hour Simple Moving Average (SMA). Slicing below this critical line of defense could put a 28% decline on the radar.
ETH/USDT 12-hour chart
If buying pressure increases, the first area of resistance will appear at the 100 twelve-hour SMA at $3,039, coinciding with the 21 twelve-hour SMA.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended Content
Editors’ Picks
Is Altcoin Season here as Bitcoin reaches a new all-time high?
Bitcoin reaches a new all-time high of $98,384 on Thursday, with altcoins following the suit. Reports highlight that the recent surge in altcoins was fueled by the victory of crypto-friendly candidate Donal Trump in the US presidential election.
Shanghai court confirms legal recognition of crypto ownership
A Shanghai court has confirmed that owning digital assets, including Bitcoin, is legal under Chinese law. Judge Sun Jie of the Shanghai Songjiang People’s Court shared this opinion through the WeChat account of the Shanghai High People’s Court.
BTC hits an all-time high above $97,850, inches away from the $100K mark
Bitcoin hit a new all-time high of $97,852 on Thursday, and the technical outlook suggests a possible continuation of the rally to $100,000. BTC futures have surged past the $100,000 price mark on Deribit, and Lookonchain data shows whales are accumulating.
Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange
Shiba Inu trades slightly higher, around $0.000024, on Thursday after declining more than 5% the previous week. SHIB’s on-chain metrics project a bullish outlook as holders accumulate recent dips, and dormant wallets are on the move, all pointing to a recovery in the cards.
Bitcoin: New high of $100K or correction to $78K?
Bitcoin surged to a new all-time high of $93,265 in the first half of the week, followed by a slight decline in the latter half. Reports highlight that Bitcoin’s current level is still not overvalued and could target levels above $100,000 in the coming weeks.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.