Financial giant JP Morgan has delivered a forecast predicting that Ethereum (ETH) will surpass Bitcoin (BTC) in 2024. Despite the looming halving event for Bitcoin, which traditionally tightens its token supply, JP Morgan maintains a “cautious” outlook for the industry in the upcoming year.
The analysts at JP Morgan pointed to what they describe as “excessive optimism” surrounding Bitcoin, anticipating it to be a hindrance to its performance in 2024. They emphasized that the impact of the impending halving event is already deeply ingrained in the current value of Bitcoin, suggesting limited room for substantial growth in the coming year.
While Bitcoin has experienced a resurgence in excitement, fueled by expectations around the potential approval of the Spot Bitcoin ETF and the approaching halving, JP Morgan’s divergence from the general sentiment is noteworthy. The bank’s forecast raises questions about the sustainability of Bitcoin’s positive trajectory.
JP Morgan’s skepticism about Bitcoin’s prospects in 2024 is rooted in concerns about the halving event’s impact on miners. They highlighted the potential doubling of production costs based on current hash rates and mining difficulty, coupled with a projected 20% decrease in hash rates, leading to the exit of over-costed miners from the market. Additionally, the bank believes expectations of capital inflows into Spot Bitcoin ETF products are overstated.
Contrary to Bitcoin, JP Morgan sees potential in Ethereum, citing the upcoming EIP-4844 “Proto-dank sharding” update as a factor that could positively influence Ethereum’s performance in the coming year. However, the bank still expressed reservations about centralized mining within the Ethereum network.
As the cryptocurrency landscape evolves, JP Morgan’s divergence from mainstream optimism adds an intriguing layer to the narrative, leaving the crypto community with questions about the future dynamics of these leading digital assets.
Source: Watcher Guru