JPMorgan Forecasts Ethereum to Outperform Bitcoin in 2024

JPMorgan analysts predict Ethereum's resurgence, surpassing Bitcoin in 2024. Despite general caution in the crypto market, the bank sees Ethereum reclaiming market share.

EIP-4844 Upgrade Drives Optimism

JPMorgan cites the EIP-4844 upgrade, also known as Protodanksharding, as a key catalyst. Expected in H1 2024, this upgrade promises significant improvements in Ethereum's network activity, potentially propelling Ethereum ahead.

Protodanksharding Unveiled

An essential step towards Danksharding, Protodanksharding introduces data blobs, temporary data packets attached to blocks. This innovation enhances Layer 2 networks like Arbitrum and Optimism, improving efficiency without altering Ethereum's block size.

Bitcoin's Priced-In Halving

JPMorgan analysts dismiss potential bullish factors for Bitcoin in 2024, such as spot ETF approval and the upcoming halving, as already priced in. They suggest a reasonable decrease in the bitcoin market price-to-production cost ratio post-2024 halving.

DeFi's Struggle in Traditional Finance

JPMorgan expresses disappointment in DeFi's failure to integrate into traditional finance, hindering the transition from crypto native to real-world applications. Key blockchain applications in traditional finance occur outside public blockchains, limiting DeFi's impact.

Tokenization Challenges and Slow Evolution

Tokenization faces hurdles, evolving slowly due to fragmentation, lack of cooperation, and interoperability issues. JPMorgan attributes delays to the introduction of central bank digital currencies by the Fed and the ECB, alongside regulatory gaps.

Tentative Crypto VC Funding Improvement

JPMorgan acknowledges a modest improvement in crypto venture capital funding in Q4 2023. However, they remain cautious, deeming the progress tentative. A sustained improvement into Q1 2024 could signal the end of the "crypto winter," according to the analysts.

while JPMorgan acknowledges certain positive trends, they maintain an overall cautious stance towards the crypto market in 2024, emphasizing the challenges faced by DeFi and the measured improvement required in venture capital funding.