(CoinDesk) Morgan Stanley strategists say Ethereum carries more concentration risk since it is held by a small number of accounts.
The bank’s analyst Denny Galindo says the Ethereum network is less decentralized compared to Bitcoin, with the top 100 addresses holding 39% of ether compared to only 14% for BTC.
The bank strategists say although Ethereum dominates the non-fungible tokens and decentralized finance sectors, this could change over time as new rivals come up.
The strategists further warn that DeFi and NFTs, which drive the most activity on Ethereum, are subject to new regulations. They say that new rules would restrict activity and lower demand on the network.
The bank says Ethereum suffers from the risk of “blockchain bloat and scalability,” warning that the network needs to store huge volumes of data, with the storage demand likely to outstrip its resources.
The strategists say that Ethereum is 30% more volatile than gold, also citing the high transaction costs that makes the platform costly.
ETHUSD is down -2.07%, BTCUSD is down -1.19%.
