JPMorgan’s Bold Bet: Ethereum Edges Bitcoin for 2024 in Grand Crypto Showdown

Analysts at the American banking giant JPMorgan Chase believe that Ethereum is a better investment than Bitcoin in 2024.

Analysts at JPMorgan Chase, the leading American banking firm, have predicted that Ethereum (ETH) will have higher growth volatility than Bitcoin (BTC) in 2024, though they remain cautious about the overall outlook for the crypto market.

As explained by CoinNerd, EIP-4844 (also known as Proto-danksharding) is an upgrade that provides Ethereum with an additional way to scale the network by fragmenting data on the blockchain into smaller chunks called “blobs,” thereby reducing gas fees, especially for layer-2 solutions in the form of rollups such as Arbitrum and Optimism.

However, the hard fork to deploy EIP-4844, named Dencun, has been repeatedly delayed by Ethereum developers, with the updated expected date being around March or April 2024.

gm, eth devs decided yesterday to push cancun/deneb activation on the goerli testnet to jan.

why this matters: assuming public testnet forks are spaced at least 2 weeks apart, there's a high chance now that mainnet activation of cancun likely won't happen until march and some…

— Christine Kim (@christine_dkim) December 8, 2023

JPMorgan believes that the positive events that the cryptocurrency investment community is looking forward to for Bitcoin in 2024, such as the approval of the Bitcoin spot ETF and the fourth halving in history, have already been reflected on the price chart in recent months, and therefore may not have a positive impact.

In addition, analysts also pointed out that after the 2020 halving, the ratio of Bitcoin price to mining costs has decreased, and predict that the same thing could happen again when the ratio is currently 2.0.

The ETH/BTC exchange rate is 0.052, the lowest since June 2022 and has been on a downward trend since the The Merge event in September 2022, indicating that the market sentiment is still in favor of BTC over ETH, despite the fact that the Ether supply in December 2023 has returned to a state of deflation.

Regarding the DeFi segment, JPMorgan believes that the sector has not yet seen significant progress, as it has not yet been able to infiltrate traditional finance, which is considered necessary to help crypto applications have more practical uses in the real world.

In addition, the activity of tokenizing real assets onto the blockchain is also proceeding at a slow pace, only stopping at individual pilot tests conducted by major banks, lacking the connection and interaction between platforms. The prospect of the emergence of a central bank-backed digital currency (CBDC) is also remote when neither the Fed nor the ECB have yet issued regulations recognizing and supervising crypto.

JPMorgan analysts say that although the funding situation for the cryptocurrency industry in Q4 2023 has improved significantly, it still needs to continue into 2024 to be able to confirm that the money flow has really returned to the cryptocurrency market, signaling the end of the “crypto winter” period.

JPMorgan itself has a number of different initiatives to accept cryptocurrencies, such as the JPM Coin project for trial payments. However, the CEO of the bank, Jamie Dimon, recently told the US Congress that he strongly opposes crypto because it facilitates criminal acts such as money laundering, tax evasion, and drug trafficking, and if he had the power to decide, he would eliminate cryptocurrency.

* We hope this information will help you in your investment process, but this is not investment advice. Every investment carries risk, especially in this industry, so DYOR before making a decision.