- JPMorgan cautious on crypto markets until 2024, sees Ether outperforming Bitcoin due to the osEthereum upgrade.
- Bitcoin ETF approval is unlikely to trigger major price gains that could lead to a buy-the-rumor, sell-the-fact effect.
- Grayscale’s discount narrows, indicating market expectation of Bitcoin ETF approval; Bitcoin price up 110% in 2023.
JPMorgan, a big financial company, is being careful about cryptocurrency markets until 2024. However, they believe that ether (ETH) will do better than bitcoin (BTC) and other cryptocurrencies. This is because Ethereum, the platform for ether, is getting an upgrade that will make it work better and faster.
JPMorgan also thinks that the U.S. Securities and Exchange Commission (SEC) deciding whether to allow bitcoin exchange-traded funds (ETFs) won’t lead to big price increases. They mentioned in a report that when the SEC approves bitcoin ETFs early next year, there’s a good chance that people will buy based on rumors and then sell when it actually happens.
“Excessive optimism by crypto investors arising from an impending approval of spot bitcoin ETFs by the SEC has shifted bitcoin to the overbought levels seen during 2021.”
JPMorgan
JPMorgan also mentioned that the upcoming Bitcoin halving event in 2024 is not likely to have a significant impact on its price because the effects of this event are already considered in the current price.
In the case of Ether, it is expected to perform well because of the EIP-4844 upgrade, also known as proto-danksharding. This upgrade is an improvement on sharding, a technique that divides the Ethereum network into smaller parts to make transactions faster. Danksharding, a variation of sharding, uses these smaller parts (shards) to create more space for data groups. Proto-danksharding introduces a new transaction type called the “blob-carrying transaction.”
JPMorgan also observed that there has been some renewed interest in venture capital (VC) funding in the fourth quarter of 2023, but it seems to be cautious and not very pronounced.
Despite seeing some progress in DeFi activities, the report highlighted that the major letdown remains the inability of DeFi to make significant inroads into the traditional financial system. This transition is crucial for the cryptocurrency ecosystem to move beyond being solely native to the crypto world and start finding practical applications in the real world.
Industry analysts have pointed out that there is a high likelihood of approval for Bitcoin exchange-traded funds (ETFs) by early January, with a probability estimate of around 90%.
This confidence is reflected in the fact that Grayscale’s discount to net-asset value (NAV), which was at 45% earlier in the year, has now reduced to 13%. This reduction in discount suggests that the market is increasingly expecting and pricing in the approval and conversion of bitcoin ETFs.
Furthermore, the price of bitcoin has increased significantly, rising by 110% year-to-date. This surge in value is partially attributed to the optimism surrounding the potential approval of spot ETFs for bitcoin.
