JPMorgan says Ether will outperform Bitcoin next year

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JPMorgan has said that Ether (ETH) will surpass Bitcoin and other cryptocurrencies in 2024.

“We believe that next year Ethereum will re-assert itself and recapture market share within the crypto ecosystem,” JPMorgan analysts, led by Nikolaos Panigirtzoglou, wrote in a note on Wednesday.

“We believe that next year Ethereum will re-assert itself and recapture market share within the crypto ecosystem,”

Nikolaos Panigirtzoglou, managing director at JPMorgan.

Panigirtzoglou highlighted that ETH’s potential to outperform Bitcoin is primarily linked to the expected EIP-4844 upgrade or Protodanksharding, slated for the first half of 2024. They anticipate this upgrade will significantly enhance Ethereum’s network activity, potentially boosting Ethereum’s performance ahead of Bitcoin.

Protodanksharding is an initial phase toward implementing Danksharding, a more efficient form of sharding for Ethereum. Unlike the original sharding method, Danksharding bypasses the complex process of dividing Ethereum into multiple shard chains.

Instead, it introduces data blobs—temporary data packets attached to blocks—which can hold more data than blocks but are not permanently stored or accessed by the Ethereum virtual machine.

The analysts said the upgrade would greatly help Layer 2 networks such as Arbitrum and Optimism. It offers extra temporary data space, boosting network speed and lowering transaction costs for these networks on Ethereum. Essentially, data blobs improve Layer 2 networks without changing the Ethereum block size.

Moreover, the analysts believe positive factors for Bitcoin next year, like the upcoming halving, are already factored into the market.

They noted that after the 2020 halving, Bitcoin’s price-to-production cost ratio dropped, suggesting a similar trend could follow the 2024 halving. The analysts suggested that considering the existing Bitcoin hash rate and mining difficulty, miners’ production cost would increase from about $22,000 now to roughly $44,000 after the halving.

At Bitcoin’s current price of about $42,000, there is an expected five percent decrease in the post-halving hash rate, which the analysts consider too conservative. They anticipate a more significant 20 percent drop in the hash rate, leading to higher-cost miners leaving the market.

ETH price surges 5.5 percent

Cryptonews reported that Ethereum’s price surged by 5.5 percent Thursday, reaching $2,298 in a market that also gained by the same percentage in the past 24 hours.

This surge aligns with JPMorgan’s prediction that Ethereum could outperform Bitcoin next year.

ETH has risen by 13 percent in the last 30 days and has seen a 73 percent increase over the past year.

The fundamentals remain robust, with the Ethereum blockchain accounting for over 50 percent of the total value locked (TVL) in the sector.

This year, Ethereum received positive adoption news, including PayPal launching an Ethereum-based stablecoin and Coinbase introducing its layer-two network for Ethereum.

The upcoming arrival of Protodanksharding is expected to further bolster the Ethereum price. As per Cryptonews, it might surge to $3,000 in the early months of the year and potentially surpass its current all-time high (ATH) of $4,878 in the latter half of 2024.

JPMorgan CEO expresses opposite views on Bitcoin, crypto

Last week, while testifying before the U.S. Congress, JPMorgan Chase CEO Jamie Dimon expressed his views on the Bitcoin and crypto market, emphasizing that he would choose to shut down Bitcoin and cryptocurrencies if he had the power to.

“I’ve always been deeply opposed to crypto, Bitcoin, etc,” said Dimon. “The true use case for it is criminals, drug traffickers, anti-money laundering, tax avoidance. And that is a use case.”

Dimon’s viewpoint mirrors his earlier comments on Bitcoin, where he called it a fraud and cautioned investors about its speculative nature.

“It is some what anonymous, not fully. And because you can move money instantaneously because it doesn’t go through know you customer, sanctions, OFAC — they can bypass all of that,” Dimon said. “If I were the government I’d close it down.”