When the market is unregulated and free, increased competition is bound to occur. The market experts firmly believe that a competitive and free market offers a wide range of investment choices to the investors which eventually becomes a great fuel that moves the entire platform forward. The same characteristic applies to the cryptocurrency market as well.
While the competition in the crypto world is definitely bringing a lot of new choices, it’s also causing a shift in the market. Ethereum, considered as a widely popular blockchain platform from the many open source platforms out there, has successfully maintained a stronger position in the sector since long. But with the increasing competition from blockchain projects such as Tron, Neo, and EOS, it seems that ETH is losing both its popularity as well as market share to its competitors.
ETH Under Pressure
Like many other digital currencies, Ethereum too has faced the price actions which cannot be termed as fully positive through the entire previous year. While ETH did climb high at one point by reaching the price of $1,400; it also dropped to about 90 dollars afterwards. At the time of writing, it is being traded at 138.09 USD, somewhat recovering from its low points.
However, it must be noted that ETH has not registered significant recovery of the losses it has faced as much as the other blockchains have. But if we talk about the market capitalization rankings, ETH was largely successful in maintaining its 2nd rank.
On the other hand, if we analyse the trading value of ETH’s competitors like EOS and Tron, we can observe a significant growth. EOS was once down to less than 1.70 USD but is currently being traded at 4.23 USD, showcasing a visible growth. TRX or Tron too has recorded an improved value from its last year’s low trade value of 0.011 USD as it is now being traded at $0.023519.
Ikigai’s founder Travis Kling in his interview with Bloomberg expressed his opinions on the current market scenario for Ethereum. He explained saying that the decision to own ETH today entirely depends on an individual based on their perception of its future adoption.
Brighter Future For Ethereum Competitors?
The present market scenario does seem good for Ethereum as apparently, investors are still considering it as a great investment option, thanks to ETH’s position as the 2nd biggest digital currency by market capitalization. However, ETH’s competitors are steadily drawing increased numbers of dApps and developers which may prove to be the key elements helping them beat Ethereum in the long run.
As per Bloomberg’s report, last year ETH had 100% dApps users on its network which has fallen down to 28%, last recorded in January this year. Elaborating further, the report states that the majority of these migrated users have joined the EOS network as it presently has 48% users while the remaining 24% have switched to Tron.
Talking about this migration, Kling said,
“To the extent that Ethereum competitor projects get traction with developers, with users, with dapps built on top of the platform, that will be viewed by the market as being detrimental to the overall value of Ethereum, and that can have a negative price impact on Ether.”
DappRader’s COO Patrick Barile too expressed his views on the reason he feels Ethereum is experiencing user exits. He said the newer protocols are offering greater speed and are capable of handling high transaction volumes, significantly enhancing the overall user experience. The combination of these features, according to Barile, have ultimately led to the mass adoption of ETH’s competitors.
After analysing these factors, currently it is difficult to say whether ETH will regain its stronger position as well as the lost users but there are surely chances of Ethereum improving its platform due to rising competition.