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Since its launch in 2015, Ethereum has been considered the successor to Bitcoin because it offered tools that allow programmers to create apps that could perform transactions automatically. Now, however, Bloomberg reports that Ethereum is losing market share.
According to the publication, long-promised projects are now being delivered on rival platforms and several startups have begun using cryptocurrencies such as EOS and Stellar to raise funds through ICOs.
Kyle Samani, co-founder of hedge fund Multicoin Capital Management stated, “The simple reality is that until the last six-to-nine months, there were no other options besides Ethereum. Now there are.”
The increasing popularity of rival projects has had an impact on the demand for Ether, which has been range-bound for some time now. Furthermore, Bloomberg argues that online video-game players don’t have to depend on Ether to purchase in-game items.
“Owning Ethereum today is a call option on what you think the network is going to be in the future," said Travis Kling, founder of crypto hedge fund Ikigai. “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."
Read more: Vitalik Buterin says Ethereum needs 100,000 transactions per second
Additionally, data from DappRadar has suggested dApp market share has been shifting. Just 28% of dApp users were on the Ethereum network as of January. A year earlier it was 100%. EOS now claims 48% of active dApp users while Tron has 24%.
Patrick Barile, Chief Operating Officer of DappRadar explained, “The reason why they got so much adoption, those new protocols, is that they offer considerably better speed, transactions per second. “The volume of transactions they can do is considerably higher. That means if you have a dapp, then you have a much better user experience."
