- JPMorgan maintains a cautious outlook on the cryptocurrency market for 2024, predicting Ether to outperform Bitcoin.
- The Ethereum blockchain’s upcoming EIP-4844 upgrade is expected to boost Ether’s performance due to enhanced scalability.
JPMorgan’s Cautious Crypto Outlook for 2024
JPMorgan, a leading Wall Street firm, has expressed a cautious perspective regarding the cryptocurrency markets heading into 2024. Despite this overall caution, the firm anticipates a standout performance from Ether (ETH), mainly driven by significant technological advancements on the Ethereum blockchain.
One of the key upgrades that JPMorgan expects to fuel Ether’s potential success is the EIP-4844 upgrade, or proto-danksharding. This advancement in Ethereum’s infrastructure aims to enhance the blockchain’s scalability by implementing sharding – a process of dividing the network into multiple parts to expedite transaction processing. Proto-danksharding, in particular, introduces a novel transaction type to Ethereum, known as the “blob-carrying transaction,” which is poised to expand data capacity on the network.
Bitcoin ETFs and DeFi Under the Lens
The report also touches upon the expected impact of the U.S. Securities and Exchange Commission’s (SEC) decision on spot Bitcoin exchange-traded funds (ETFs). JPMorgan analysts, led by Nikolaos Panigirtzoglou, suggest that the approval of these ETFs early next year might not trigger significant market rallies. They indicate a potential
citing the current overbought levels of Bitcoin reminiscent of those seen in 2021. Furthermore, JPMorgan notes that the much-anticipated 2024 Bitcoin halving event appears to be already factored into market prices.
In the realm of decentralized finance (DeFi), JPMorgan acknowledges a modest revival in venture capital funding in the latter part of 2023. However, this resurgence seems tentative, and the firm points out DeFi’s ongoing struggle to make substantial inroads into the traditional financial system. According to the report, this integration is crucial for the crypto ecosystem to transition from crypto-native to real-world applications, an area where progress has been limited.
In summary, while JPMorgan’s outlook for the cryptocurrency market in 2024 remains guarded, the anticipated advancements in Ethereum’s infrastructure, particularly the EIP-4844 upgrade, are expected to give Ether a significant edge over Bitcoin and other cryptocurrencies. This projection underscores the dynamic and evolving nature of the crypto market, where technological innovation continues to play a pivotal role in shaping investment trends and market performances.