Ethereum, the world’s second-largest cryptocurrency has outperformed in 2021 while delivering nearly 220% returns in a single year. However, off lately, the ETH price has largely followed Bitcoin and has been moving sideways.
As we enter 2022, the Ethereum blockchain continues to face major challenges in terms of scalability. The latest report from JPMorgan states that Ethereum’s dominance in the area of decentralized finance (DeFi) could be at considerable risk in 2022.
They noted that the Ethereum Sharding implementation remains the “most critical” update for scalability and if delayed, it could mean that Ethereum could lose its market share to other Layer 1 competitors that are pushing deeper into the DeFi space.
Ethereum currently holds a 70% market share in DeFi and this could drop further in 2023, wrote JPMorgan analysts led by Nikolaos Panigirtzoglou. The analyst further stated:
The “optimistic view about Ethereum’s dominance is at risk. Scaling, “which is necessary for the Ethereum network to maintain its dominance, might arrive too late.”
Trending Stories
Ethereum developers have been working hard for the transition from the current PoW to the Pos Ethereum 2.0 model. Of course, the transition will happen in multiple phases and not a one-shot implementation. Last month itself, Ethereum lead developer Tim Beiko announced the launch of the Kintsugi Merge Testnet. Recently, Vitalik Buterin said that the Ethereum 2.0 launch shall happen anytime around mid-2022, optimistically.
Losing it to the Competitors
Looking at the pace at which other Layer 1 blockchain platforms have arrived in 2021, JPMorgan believes it will be tough for Ethereum to keep up with its market share. Players like Solana, Avalanche, Terra, and Binance Smart Chain have secured large amounts of funding to secure their ecosystems.
Thus, these players are most likely to further eat into Ethereum’s market share. JPMorgan notes that if the competitors’ ecosystem grows to a point of no return for its customers, they would not want to switch back to Ethereum in that case.
“In other words, Ethereum is currently in an intense race to maintain its dominance in the application space with the outcome of that race far from given, in our opinion,” wrote JPMorgan analysts.
If this happens, it might as well dampen any prospects of rallying in the ETH price. Analysts have been giving targets of $10K and above for Ethereum and that will only happen if the Ethereum 2.0 developments keep up the pace.
- Incoming Shiba Inu Rally? Over 22 Billion SHIB Tokens Burned Across 497 Transactions
- French Luxury Brand Balenciaga To Accept Crypto Payments In U.S.
- PayPal May Soon Accept All Forms Of Crypto Reveals Vice-President
- Crypto Analyst Predicts What Will Kickstart Next Bitcoin Bull Run
- Just-In: South Korea May Sue Crypto Exchanges Over Terra Crash
- Breaking: S. Korean Exchanges Redflag Litecoin Mimblewimble Update; May Delist LTC
- Just-In: PlanB Reveals Bitcoin S2F Prediction For 2024 Halving
- Heavy Outflows Force Investors to Seek Refuge In Multi-crypto Investment Products
- PlanB: When Will Bitcoin (BTC) Price Cross $500K?
- Case Study: P2E Gaming Projects Tackling The Barriers To Web3 Mass Adoption
- What Next For The Fast Recovering FTM Price?
- Ethereum Price Analysis: Triangle Pattern Foretells Upcoming Rally in ETH
- Zilliqa Price Analysis: Channel Breakout Hints ZIL Price to hit $0.1
- Bitcoin Price Analysis: Trapped Bullish Momentum Need Triangle Breakout
- FTM Price Analysis: Buyers Tease Breakout From Long-Coming Trendline
- GALA Price Analysis: High Momentum Fallout Warns $0.075 Fallout
- Solana Price Prediction 2022: Bulls to drive SOL Price to new Highs?
- Theta Price Prediction 2022 : Analysts Insights into the crucial Reversal levels
- Sandbox Price Prediction 2022 : Analysts Show Optimism Towards The Metaverse SAND Token
- Apecoin Price Prediction 2022 : The future of Web3 and NFTs ?
