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Ethereum Loses Market Share to Competitors

Updated: Jul 25, 2024
Published: Apr 4, 2019
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In a free and unregulated market, it's inevitable that competitors will emerge. These companies often help drive the original platforms forward. They also present investors with several options to choose from.

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EOS, TRX, and Neo competing with Etherium

Ethereum (ETH) is considered one of the most prominent open-source blockchain platforms. It has long been seen as a leader in the industry. But, with the emergence and growth of competitors such as EOS, Tron (TRX), and Neo, ETH’s market share and popularity have been negatively affected.

Over the past year, Ethereum has shown less than positive price action. It has gone from highs of $1,400 to lows of $90. Even so, ETH is still the second largest cryptocurrency when it comes to market cap. That said, it hasn’t been able to reclaim its losses, unlike some of its competing blockchain platforms.

Currently, the currency is trading at $4.50. EOS, which is considered to be one of the most important of Ethereum's competitors, is now up substantially. Since 2018, it has gone from trading at $1.70. In addition, Tron (TRX) has also seen a significant increase from its lowest point of $0.011 to $0.024.

Competing Dapps are overtaking Etherium

Travis Kling, the founder of cryptocurrency hedge fund Ikigai, spoke about Ethereum to Bloomberg. He stated that “Owning Ethereum today is a call option on what you think the network is going to be in the future.”

Although most cryptocurrency investors still appear to prefer Ethereum, competitors are gaining ground with their decentralised applications (Dapps). These Dapps could help other currencies surpass Ethereum. Bloomberg reported that “28% of Dapps users were on the Ethereum network as of January 2019, compared with 100% a year earlier.” Currently, 48% of users have migrated to EOS and 24% of users are now with Tron.

Kling stated that "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."

Other protocols offering faster transactions

Patrick Barlie, chief operating officer at DappRader, explained that people are leaving Ethereum because other protocols offer a considerably faster transaction speed. This is giving the user a much better experience.

"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," Barile explained.

As the competition grows, time will tell if Ethereum gets the push it needs to improve its platform and deliver users a better Dapp experience.

Ethereum picture licensed via Shutterstock

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