JPMorgan's Crypto Market Approach: Caution Predicted into 2024

• JPMorgan Exhibits Caution About Crypto Markets, Predicts Rise of Ether
• Speculation About SEC's Decision on Spot Bitcoin ETFs
• Concerns about Bitcoin's Overbought Levels
• Ethereum's EIP-4844 Upgrade Could Boost Ether
• Venture Capital Funding & Decentralised Finance Activity

JPMorgan Exhibits Caution About Crypto Markets, Predicts Rise of Ether

Global financial services firm JPMorgan displays circumspection about cryptocurrency markets as we enter 2024, yet anticipates ether (ETH) to surpass bitcoin (BTC) and other digital currencies. The expected performance leap of ether is attributed to an upgrade poised to enhance the scalability of the Ethereum$2,315 -2.42% blockchain.

Speculation About SEC's Decision on Spot Bitcoin ETFs

JPMorgan's report released Wednesday expresses skepticism about the U.S. Securities and Exchange Commission's (SEC) pending decision on spot bitcoin exchange-traded-funds (ETFs) eliciting substantial gains. Analysts, including Nikolaos Panigirtzoglou, anticipate a high probability for a buy-the-rumor/sell-the-fact scenario once the SEC greenlights spot bitcoin ETFs early next year.

Concerns about Bitcoin's Overbought Levels

Overblown optimism among crypto investors, triggered by the potential approval of spot bitcoin ETFs by the SEC, has pushed bitcoin to overbought levels, not seen since 2021, according to JPMorgan. The financial giant further suggests that the upcoming 2024 bitcoin halving event is already factored into current prices.

Ethereum's EIP-4844 Upgrade Could Boost Ether

On the positive side, ether is forecasted to excel due to the EIP-4844 upgrade, also known as proto-danksharding. This evolution of sharding - a process that divides the network into smaller parts to expedite transaction speed - employs Danksharding to expand space for data groupings. Proto-danksharding involves introducing a new transaction type to Ethereum: the blob-carrying transaction.

Venture Capital Funding & Decentralised Finance Activity

JPMorgan's report also points to a slight reinvigoration in venture capital (VC) funding in Q4 2023, although this resurgence seems rather tentative. Despite some progress in decentralized finance (DeFi) activity, the report highlights the persistent challenge for DeFi to infiltrate traditional financial infrastructures. This breakthrough is deemed crucial for the crypto ecosystem to evolve from crypto-native to real-world applications.

Edited by Jonathan Stoker