• JPMorgan analysts show confidence in the Solana network 
  • Newer blockchains are attracting NFT developers
  • ETH price could be impacted if the trend continues

Ethereum, the second most sought-after token, is losing ground to other cryptocurrencies, such as Solana (SOL), in the non-fungible token (NFT) market because of its high transaction fees on the network, global investment bank JPMorgan analysts said.

JPMorgan’s analysts, led by Nikolaos Panigirtzoglou, pointed out that high gas fees and congestion have pushed NFT apps away from the Ethereum network, according to a report.

"It looks like, similar to DeFi apps, congestion and high gas fees has (sic) been inducing NFT applications to use other blockchains," Panigirtzoglou said in the note.

JPMorgan's global markets team has shown confidence in the Solana network and said that it has been seizing market share from Ethereum in recent weeks.

The analysts warned that if the pattern continues, it could impact Ethereum's price. ETH was trading at $2,856.64 at 1.24 a.m. ET, CoinMarketCap data showed.

The JPMorgan note pointed out that newer blockchains including Solana, Wax, or Tezos, are attracting NFT developers with lower transaction fees.

In another report released earlier this month, JPMorgan analyst Kenneth Worthington expressed confidence that 2022 would be the year of financial tokenization. The development of crypto technology will continue, driven by the scaling of Layer-1 and the introduction and growth of Layer-2, he said, adding that the introduction of Layer-2 and Ethereum's merge will speed up transactions and could cut energy consumption.

Ethereum, Bitcoin
In this photo illustration, visual representations of the digital Cryptocurrency, Bitcoin and Ethereum are pictured atop a Japanese 10,000 yen note on March 20, 2020 in Katwijk, Netherlands. Yuriko Nakao/Getty Images