Ether (Ether) has no compelling narrative compared to peers, such as Bitcoin (BTC): JPMorgan (JPM)

Ether (Ether) has underperformed other cryptocurrencies in recent months while the Ethereum blockchain has faced “intense” competition from other networks, Wall Street Bank JPMorgan (JPM) said in a research report On Wednesday.

The token lacks a compelling narrative such as the larger Bitcoin peer (BTC, the bank said, added that the benefits of bitcoin from its understanding as a store of value and as digital gold.

In spite of upgrades, such as DencunThe activity moved from the main network of Ethereum to Layer 2’s, which is detrimental to blockchain growth, the report said. The latest network upgrade, Pectralikely to occur in early April.

“Confirmative pressures have led to some Decentralized application .

With the examples Decentralized exchange (Dexs) like Uniswap, Dydx and Hyperliquid, the bank said.

Uniswap is coming move Unichain is important because it is one of the “largest gases that have depleted protocols,” and its transition can result in a significant loss in the network fee, the bank said.

JPMorgan said that the trend of DAPPs moving to other layers 2 or alternative layer 1s may negatively affect Ethereum by reducing activity on the main network, which may result in lower transaction fees and income of Validator.

Layers 2s are separate blockchains built on top of Layer 1sOr the base layer, which will reduce bottlenecks with scaling and data. In terms of supply, it can produce ether inflationary as “fewer transactions indicating to have reduced token combustion,” written by the set.

The bank noted that Ethereum’s growth was behind competitors such as Solana, who saw a flow to the activity linked to the Memecoins.

The Ethereum ecosystem is still dominant in Stablecoin, Decentralized Finance (Defi) and Tokenization Spaces beyond these challenges, the bank said.

The network may see an increase in institutional demand from tokenization businesses but “competition from other networks will likely remain strongly in the predictable future,” the report added.

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