Alongside their “cautious” outlook of the industry in the coming year, JP Morgan has predicted that Ethereum (ETH) will outperform Bitcoin (BTC) in 2024. Moreover, they have stated the forecast despite the incoming halving event that will decrease the number of total Bitcoin tokens in circulation.
Ultimately, JP Morgan has highlighted “excessive optimism,” as working against Bitcoin in the coming year. Additionally, analysts at the institution have noted the aforementioned halving event is “largely priced in” to the current value of the asset. Therefore, they are not expecting immense gains over the next year.
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JP Morgan Unenthusiastic About Bitcoin’s Prospect in 2024?
For much of 2022 and the early parts of the subsequent year, Bitcoin struggled in the mainstream. Indeed, the entire industry endured a crypto winter that saw a host of concerns regarding its ability to bounce back. Now, with just one month before 2024 arises, the excitement around the asset has never been higher.
Anticipation over a potential Spot Bitcoin ETF approval and the upcoming halving have driven elation over its potential. However, one bank is not as bullish on crypto’s overall positive performance throughout next year. JP Morgan has stated that Ethereum could outperform Bitcoin in 2024.
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The bank released an outlook on the coming year that they have called “cautious” considering a host of factors. Specifically, they have cited the potential for over-excitement to ultimately work against Bitcoin. Subsequently, this led the asset to be overbought in a market that has already factored in the upcoming halving event.
JP Morgan highlighted how the halving event will affect miners. Indeed, they noted that based on current hash rates and Bitcoin mining difficulties, production costs should double. Additionally, they have predicted a 20% decline in the hash rate, leading miners with excessive costs to exit the market altogether. Moreover, they stated that expectations for capital inflows into Spot Bitcoin ETF products are exaggerated.
Conversely, they discussed Ethereum’s upcoming EIP-4844 “Proto-dank sharding” upgrade. They discussed its potential impact on the asset’s performance over the coming year especially. Yet, they still have expressed their concerns over centralized staking on the Ethereum network. If JP Morgan is correct regarding its Bitcoin concerns, the asset could greatly struggle to live up to the hype.
