JPMorgan Chase: ETH will surpass BTC in 2024

Original title: JPMorgan says ether will likely outperform bitcoin next year

Original author: Yogita Khatri

Original source: theblock

Compiler: Kate, Mars Finance

Points

• JPMorgan analysts said the ETH coin could outperform BTC and other cryptocurrencies in 2024.

• This prediction was made after ETH Workshop upgraded to EIP-4844 next year.

JPMorgan Chase & Co. expects ETH coin to outperform BTC and other cryptocurrencies in 2024, although the bank remains “cautious” about the crypto market in general in the year ahead.

“We believe that next year ETH Fang ETH will reassert itself and regain market share in the crypto ecosystem,” JPMorgan analysts led by Nikolaos Panigirtzoglou wrote in a note on Wednesday. "The main catalyst is the EIP-4844 upgrade or Protodanksharding, which is expected to take place in the first half of 2024. We believe that this upgrade may be a bigger step in improving ETH Workshop’s network activities, thereby helping ETH Workshop excel. ”

Protodanksharding is the first step towards the full implementation of Danksharding, a more efficient form of ETH sharding. Unlike the originally planned sharding technology, Danksharding avoids the complex process of splitting the ETH into multiple shard chains. Instead, it introduces block blobs, i.e., temporary packets of data attached to a block, capable of holding more data than the block, but not permanently stored or accessed by ETH Fang VMs.

JPMorgan analysts reiterated that the upgrade is particularly beneficial for Layer 2 networks such as Arbitrum and Optimism, as it provides additional temporary data space to increase network throughput and reduce transaction fees for ETH Layer 2 networks. Essentially, data blobs increase the efficiency of the Layer 2 network without changing the block size of the ETH.

BTC halved price

JPMorgan analysts said factors seen as bullish BTC next year, including the possible approval of spot ETFs and the imminent halving, have been priced in.

The analyst mentioned that after the 2020 halving, the ratio of market prices to production costs in BTC fell and said that a similar move would be justified after the 2024 halving.

“Given that the current ratio of BTC price to production cost is about x2.0, this means that the BTC halving event in 2024 is mainly reflected in the price,” the analyst concluded. ”

DeFi’s “biggest disappointment”

JPMorgan analysts say the “biggest disappointment” with decentralized finance remains its inability to hack into the traditional financial system, which is necessary for the crypto ecosystem to transition from native crypto to real-world applications.

“The biggest application of blockchain in traditional finance, i.e. overnight repo transactions via smart contracts on blockchain platforms hosted by companies such as Broadridge and JPMorgan, occurs outside of public blockchains,” the analysts said. In addition, the development of tokenization is “quite slow” and it is still “largely experimental, hampered by fragmentation, lack of cooperation and interoperability between platforms, delays in the launch of central bank digital currencies by the Federal Reserve and ECB, and lack of regulation,” they added.

Crypto Venture Capital Prospects

Although venture capital funding in the crypto space improved in the fourth quarter of this year compared to the rather sluggish situation for the rest of the year, in the opinion of JPMorgan analysts, this improvement is “quite temporary”.

“That being said, if this improvement continues through the first quarter of 2024, it would be a significant development and, in our view, herald the end of the crypto winter,” the analysts said. ”

Source: Mars Finance