On February 21, Morgan Stanley analyst Denny Galindo said in his latest report that Ethereum’s market share may decrease as investors turn to cheaper and faster competitors. “Ethereum faces more competition in the smart contract market than Bitcoin does in the store of value market,” he said. “Ethereum could lose market share as a smart contract platform to faster or cheaper altcoins.”
Galindo added that Ethereum may have scalability issues due to on-chain congestion and high transaction fees, and without an upgrade, ETH’s storage needs could eventually outstrip its own resources.
Additionally, he stated: “The changing regulatory environment presents another significant risk to Ethereum. Much of the activity on Ethereum is in DeFi and NFTs, two areas where regulations are rapidly evolving. Restricting or eliminating certain Regulations to use ethereum in some market segments may reduce the need for ethereum transactions.”