In a recently published research note, financial institution JPMorgan has expressed a measured perspective on the cryptocurrency market for the year 2024. Analysts, led by Nikolaos Panigirtzoglou, anticipate that Ether (ETH) will outperform Bitcoin (BTC), primarily driven by expectations of BTC’s underperformance.
The research note underscores the notion that the projected Bitcoin halving event in 2024 has likely already been integrated into the prevailing market price. Observing Bitcoin’s current value at approximately $42,000, the analysts contend that the impact of the halving on Bitcoin supply has been factored in by the market.
The report raises the possibility of an increase in the production cost of Bitcoin mining from approximately $22,000 to around $44,000 post-halving. This potential escalation in costs could result in a 20% decline in the hash rate and prompt miners with higher operational expenses to exit the market.
Despite the cautious tone regarding Bitcoin, the report highlights optimism for Ethereum’s performance in 2024. This positive outlook is largely rooted in the anticipated upgrade known as EIP-4844 or “Protodanksharding,” expected to enhance Ethereum’s throughput and fees significantly. The analysts predict that this upgrade will play a pivotal role in bolstering Ethereum’s network activity, positioning it for outperformance.
While the analysts cautiously acknowledge the revival of decentralized finance (DeFi) and non-fungible token (NFT) activities, citing new DeFi chains like Aptos, SUI, and Pulsechain, along with renewed interest in NFTs driven by Bitcoin Ordinals, they temper their optimism by suggesting it might be premature to anticipate a widespread resurgence in these sectors.
In a contrarian stance, JPMorgan analysts express skepticism about the potential impact of a spot Bitcoin exchange-traded fund (ETF) approval, arguing that such products might not attract new capital into the crypto market. Instead, they posit that these ETFs could redirect capital from existing Bitcoin products to spot products, potentially exerting downward pressure on Bitcoin’s price.
The research note also references JPMorgan CEO Jamie Dimon’s recent comments expressing opposition to Bitcoin and the broader crypto industry. Despite this stance, the bank maintains a division called Onyx, providing a bank-led blockchain platform, and operates JP Coin for faster payments and liquidity management.
As of the latest data, Bitcoin is trading at $42,878, reflecting a 1.8% increase over the last 24 hours and a year-to-date rise of 156%. In comparison, Ether is changing hands at approximately $2,300, showing a 3.2% gain from the same period the previous day and a 92% increase since the beginning of the year.