JPMorgan says ethereum is losing ground to rivals in the NFT market, which could boost the likes of solana

markets.businessinsider.com:

Rokas Tenys

Ethereum is losing ground to rivals such as solana in the NFT sector of the cryptocurrency universe, due to sky-high transaction fees on the network, JPMorgan has said.

Ethereum's volume share of non-fungible token trading has fallen from around 95% at the start of 2021 to around 80%, according to JPMorgan's analysts, led by Nikolaos Panigirtzoglou.

«It looks like, similar to DeFi apps, congestion and high gas fees has been inducing NFT applications to use other blockchains,» Panigirtzoglou said in a note sent to clients last week, referring to apps built for decentralized finance.

The bank's global markets team found that the solana network in particular had been seizing market share from ethereum in recent weeks.

«If the loss of its NFT share starts looking more sustained in 2022, that would become a bigger problem for ethereum's valuation,» Panigirtzoglou said.

Non-fungible tokens, or NFTs, are crypto assets that represent ownership of items such as pieces of digital art, video clips, and virtual clothing.

The now roughly $12 billion NFT market has boomed over the last year, with one digital art NFT selling for $69 million in March 2021. Bored Apes and CryptoPunks, two types of digital avatars, are some of the most popular NFTs.

The ethereum cryptocurrency network, founded in 2015, is the technology that underlies the vast majority of NFT buying and selling. Yet traders are becoming increasingly frustrated with congestion and very high transaction or «gas» fees on the network, which often add more than $80 to a purchase.

Read more: Wave Financial's Les Borsai invested in 2 NFT collections that have soared by 450% and 70% in 2 weeks. Now the chief strategy officer is looking toward another under-the-radar