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Morgan Stanley Wealth Management says the concentration on Ethereum is highly risky because the top 100 addresses hold 39% of ether compared to 14% in the Bitcoin blockchain.
Source: Coindesk
BTCUSD is down -1.22%, ETHUSD is down -1.98%
The investment bank said in a report titled ‘Cryptocurrency 201: What is Ethereum?’ that Ethereum’s market share in DeFi could decline due to increasing competition.
Morgan Stanley adds that decentralized finance and non-fungible tokens make up a larger part of Ethereum’s activity, which is susceptible to risks of unfavorable regulations.
The findings also reveal that network congestion and limited scalability are protocol-specific risks. Morgan Stanley raised concerns about the high transaction fees at the Ethereum that affect network demand.
The report warns that with the faster protocol expansion, the storage demand of the Ethereum blockchain could overwhelm its resources.
Morgan Stanley also pointed out network volatility as another risk factor in Ethereum. It says that ether has been 30% more volatile compared to bitcoin.
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