{"id":407101,"date":"2022-02-18T06:05:31","date_gmt":"2022-02-18T03:05:31","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/ethereum-dominance-may-dwindle-as-competitors-emerge-morgan-stanley\/"},"modified":"2022-02-18T06:05:31","modified_gmt":"2022-02-18T03:05:31","slug":"ethereum-dominance-may-dwindle-as-competitors-emerge-morgan-stanley","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/ethereum-dominance-may-dwindle-as-competitors-emerge-morgan-stanley\/","title":{"rendered":"# Ethereum dominance may dwindle as competitors emerge: Morgan Stanley"},"content":{"rendered":"

“# Ethereum dominance may dwindle as competitors emerge: Morgan Stanley <\/strong>”
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Morgan Stanley\u2019s wealth management global investment office has published a report on Ethereum (ETH) arguing that the blockchain\u2019s dominance could dwindle if strong market competition emerges. <\/p>\n

The investment banking giant\u2019s report is titled \u201cCryptocurrency 201: What Is Ethereum?\u201d and it provides<\/a> a detailed rundown of the ecosystem along with its advantages and disadvantages in relation to Bitcoin (BTC). <\/p>\n

\u201cDue in part to its more ambitious addressable market, Ethereum faces more competitive threats, scalability issues, and complexity challenges than Bitcoin. Furthermore, Ether is more volatile than Bitcoin,\u201d the report reads. <\/p>\n

Morgan Stanley argued that Ethereum may lose smart contract superiority to cheaper and faster blockchains \u2014 something that has often been argued by supporters of the Ethereum killer market that includes networks such as Cardano (ADA), Solana (SOL), Polkadot (DOT), and Tezos (XTZ): <\/p>\n

\u201cEthereum 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.\u201d<\/p><\/blockquote>\n

The investment bank also suggested that Ethereum poses a greater investment risk than Bitcoin as it faces greater competition in the smart contract market than \u201cBitcoin faces in the store-of-value market.\u201d<\/p>\n

\u201cFewer transactions per user are needed to \u2018use\u2019 Bitcoin, which is akin to a decentralized savings account. Ethereum demand is tied more closely to transactions. Therefore, similar scaling constraints hurt Ethereum demand more than they suppress Bitcoin demand,\u201d the report read. <\/p>\n

Other concerns raised about the network included the evolving regulatory status of app<\/a>lications built on Ethereum such as Decentralized Finance (DeFi) and nonfungible tokens (NFTs) which may see strict regulations placed on them in the future, resulting in reduced demand for Ethereum transactions.<\/p>\n

Related: <\/em><\/strong>From Morgan Stanley to crypto world: in a conversation with Phemex founder<\/em><\/strong><\/p>\n

While the centralization of Ethereum was also highlighted, with the report noting that most of Ether’s supply is held by a \u201crelatively small number of accounts\u201d:<\/p>\n

\u201cIt is less decentralized than Bitcoin, with the top 100 addresses holding 39% of Ether, which compares to 14% for Bitcoin.\u201d<\/p><\/blockquote>\n

On the bullish side of the equation, the Morgan Stanley report argued that Ethereum has greater market potential than Bitcoin, it has deflationary traits via its transaction-based burning mechanism, and its performance will significantly improve following the eventual transition to a proof-of-stake consensus mechanism: <\/p>\n

\u201cEthereum has a much bigger addressable market than Bitcoin and can therefore be worth more than Bitcoin, which is simply the market for store of value products like savings accounts and gold.\u201d<\/p><\/blockquote>\n