JPMorgan released its 2024 cryptocurrency outlook this week, providing an analysis of expected price performance and adoption trends across various digital assets. While expressing caution broadly towards crypto markets, analysts highlighted Ethereum’s coming transition as a potential bright spot.
- Ethereum price expected to outperform Bitcoin based on Ethereum merge upgrades.
- Regulatory approval of Bitcoin ETFs is unlikely to drive major upside.
JPMorgan anticipates that Ethereum will be the highest-performing cryptocurrency over the next year due to planned upgrades that will make the Ethereum network more efficient and scalable.
Ethereum to dethrone Bitcoin
The EIP-4844 upgrade, also known as “proto-danksharding,” will add capacity to Ethereum through a new transaction type called “blob-carrying transactions.” By improving network bandwidth, analysts expect demand for Ether to increase, driving price gains versus Bitcoin and other altcoins.
In contrast, JPMorgan believes Bitcoin is at an overbought level, and regulatory approval of Bitcoin exchange-traded funds (ETFs) is unlikely to have a lasting impact. They cited a “high chance of buy-the-rumor/sell-the-fact effect” post-approval, meaning prices could quickly revert lower after an initial spike.
The report also noted nascent signs that venture capital funding is stabilizing after the crypto crash of 2022. However, decentralized finance applications still lack connectivity with mainstream finance, which analysts see as necessary for further crypto adoption.
While expressing a cautious view on cryptocurrency prices overall, JPMorgan remains constructive on Ethereum’s roadmap and expects Ether to be a relative outperformer as network upgrades roll out over the next year.
Their analysis reinforces the view that crypto returns may prove selective based on project roadmaps rather than lifting the broader asset class.