Due to high transaction fees and congestion, Ethereum is losing ground to other cryptocurrencies in the NFT market, according to JPMorgan.

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JPMorgan has told its clients that ethereum is losing ground to rival cryptocurrencies, such as solana (SOL), in the non-fungible token (NFT) market due to sky-high transaction fees on the network. “It looks like, similar to defi apps, congestion and high gas fees has been inducing NFT applications to use other blockchains,” said JPMorgan.

Global investment bank JPMorgan sent a note to clients last week explaining that ethereum is losing ground to rival cryptocurrencies, such as solana (SOL), in the non-fungible token (NFT) market.

JPMorgan’s analysts, led by Nikolaos Panigirtzoglou, detailed that high gas fees and congestion have pushed NFT apps away from the Ethereum network. The analysts noted that Ethereum’s NFT volume share has fallen from 95% at the start of 2021 to around 80%.

Comparing NFT apps to decentralized finance (defi) apps, Panigirtzoglou wrote:

It looks like, similar to defi apps, congestion and high gas fees has been inducing NFT applications to use other blockchains.

JPMorgan’s global markets team found that the Solana network in particular has been seizing market share from ethereum in recent weeks.

The analysts warned that if the trend continues, it could impact ethereum’s price. At the time of writing, the price of ETH is $3,250.28 based on data from Bitcoin.com Markets. Panigirtzoglou elaborated:

If the loss of its NFT share starts looking more sustained in 2022, that would become a bigger problem for ethereum’s valuation.

Newer blockchains — such as Solana, Wax, or Tezos — are attracting NFT developers with much lower transaction fees, the JPMorgan report notes.

JPMorgan is not the only major investment bank that sees potential in solana. Bank of America said last week that solana could take market share from ethereum and become the Visa of the digital asset ecosystem.