JPMorgan Is Cautious About Crypto Markets Into 2024

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Wall Road big JPMorgan (JPM) stated it’s cautious about cryptocurrency markets into 2024, however expects ether (ETH) to outperform bitcoin (BTC) and different cryptocurrencies as a result of an improve that can make the Ethereum blockchain extra scalable.

The U.S. Securities and Alternate Fee’s (SEC) choice on whether or not to approve spot bitcoin exchange-traded-funds (ETFs) is unlikely to spur main positive factors, it stated in a report on Wednesday.

There’s a “excessive probability of buy-the-rumor/sell-the-fact impact as soon as the SEC approves spot bitcoin ETFs early subsequent yr,” analysts led by Nikolaos Panigirtzoglou wrote.

“Extreme optimism by crypto buyers arising from an impending approval of spot bitcoin ETFs by the SEC has shifted bitcoin to the overbought ranges seen throughout 2021,” JPMorgan stated, including that the 2024 bitcoin halving occasion is “largely priced in.”

Ether is more likely to shine as a result of EIP-4844 upgrade, or proto-danksharding. That is a growth of sharding – splitting the community into shards to enhance transaction pace – by means of Danksharding, which makes use of the shards to extend house for teams of information. Proto-danksharding includes including a brand new transaction kind to Ethereum: the “blob-carrying transaction.”

The financial institution notes that there was some “reinvigoration” in enterprise capital (VC) funding within the fourth quarter of 2023, however it seems “fairly tentative.”

Whereas there was some enchancment in decentralized finance (DeFi) exercise, the “greatest disappointment continues to be the shortcoming of DeFi to encroach into the standard monetary system, which is critical for the crypto ecosystem to transition from crypto native to actual world functions,” the report added.

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