Ethereum Poses High Investment Risks Than Bitcoin: Morgan Stanley
- Recently, Morgan Stanley argued that Ethereum might see its dominance diminishing as attractive competitors emerge.
- Furthermore, Ethereum encounters competitive threats, complex challenges, and scalability issues than Bitcoin.
- The investment bank trusts Ether might become more volatile than BTC.
Recently, Morgan Stanley stated that Ethereum currently leads in market dominance within the non-fungible tokens (NFTs) and decentralized finance (DeFi) marketplaces. Nevertheless, analysts trust that Ether’s dominance might dwindle amid emerging competitors.
ETH Dominance Might Diminish
Morgan Stanley’s latest report highlights that the Ethereum blockchain might lose its market share if massive competitions appear. Moreover, the analysis revealed Ethereum encounters more competitive threats, complexity challenges, and scalability issues than Bitcoin. Furthermore, the firm added Ether is highly volatile than BTC.
ETH might lose its dominance amid rivalry within the ‘smart’ contract space. The sector witnesses heightened competition than BTC in the store-of-value sector. Morgan Stanley said Ethereum could lose smart contract network market share to cheaper and faster alternatives.
The bank also said that ETH has high investment risks than BTC. That is because using Bitcoin needs fewer transactions per client. Meanwhile, Ether demand relies closely on transactions. That way, the platform’s scaling limitations might hurt ETH demand compared to BTC demand.
Moreover, the NFT and DeFi sector regulatory status might attract stiffer oversight in the coming future. Such developments might lead to reduced demand for ETH transactions. Morgan Stanley stated that Bitcoin is more decentraland than Ethereum, with top-100 addresses holding 14% of Bitcoin, compared to 39% for Ether.
Meanwhile, Morgan Stanley had a positive comment for ETH, highlighting that Ethereum boasts high potential in the market than Bitcoin, citing its deflationary method via a burning mechanism based on transactions. Moreover, Ethereum will see its performance improving significantly after transitioning to Proof-of-stake.
Ethereum Tests Critical Support
Ether price printed a climbing wedge formation on its 12hr chart, indicating pullback risks. The leading altcoin plummeted to the governing technical setup’s lower border at $2,883, matching the 50 12hr SMA. A move beneath this critical defense line might translate to a 28% drop for ETH.
Nevertheless, surged buying momentum will see Ether at the initial resistance at 100 12hr Simple Moving Average at $3,039, corresponding with the 21 12hr Simple Moving Average.
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