In their latest report, Morgan Stanley brings a market analysis from their respected strategist Denny Galindo, who claims that things are not looking bright for the silver of cryptocurrencies. From his perspective, Ethereum might soon be outperformed by faster and cheaper alternatives.
Ethereum faces more competition in the smart contract market than Bitcoin faces in the store-of-value market. Ethereum may lose smart contract platform market share to faster or cheaper alternatives, he says.
Not only does Ethereum face competition from the likes of Cardano or Solana, but Galindo is also concerned that it might soon hit scalability issues due to high gas fees and on-chain congestion. “Over time, Ethereum’s storage demand, unless changed, will likely outstrip its resources,” he adds.
The gradual increase in the number of various regulations in many countries poses another threat for the network, as it has the potential to disrupt its NFT and DeFi markets. It is these two phenomena that have recently experienced their biggest boom on the network but simultaneously face more and more regulatory restrictions by the day.
Ethereum’s Ether currently sits at $2,726 at the time of writing. The fate of the network now lies in the hands of the developers and how swiftly they will be able to adapt it to the market needs and upcoming regulations. Should they fail to do so, Ethereum might one day fall victim to more easily adaptable blockchain networks.