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JPMorgan analysts expect ethereum to overtake bitcoin next year.
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A proposed network upgrade could serve as a catalyst to gain market share, they added.
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Meanwhile, JPMorgan is also less bullish on the price of bitcoin than others on Wall Street.
According to analysts at JPMorgan, a possible network upgrade for ethereum could be bullish for the cryptocurrency next year.
In their 2024 crypto outlook, they see Ethereum overtaking Bitcoin and gaining market share.
"While we are cautious about the broader crypto markets through 2024, we expect Ethereum to outperform Bitcoin and other cryptocurrencies next year, helped by the upcoming EIP-4844 or Protodanksharding upgrade," they wrote on Wednesday.
"Protodanksharding" is essentially a proposal to reduce transaction costs and increase the number of transactions per second.
Those changes could serve as a catalyst for Ethereum to regain its share in the crypto market by improving network activity.
"We believe that next year Ethereum will reassert itself and regain market share within the crypto ecosystem," the analysts wrote.
Etherum has rode the wave of cryptocurrency comeback this year, up nearly 90% since January. The currency now stands at $2,270. But its gains have lagged behind bitcoin, which has soared about 154%.
The rally has been largely supported by optimism that a spot bitcoin ETF will soon gain regulatory approval. But JPMorgan analysts are more skeptical about bullish bets on bitcoin.
Crypto optimists believe that the approval of a spot ETF would improve liquidity and lower the barrier to entry for more investors to invest in bitcoin without owning the currency. JPMorgan, however, believes that it is not so much new capital that would flow into crypto but rather money reorganized from other crypto assets.
Also fueling enthusiasm for bitcoin is the halving event scheduled for April next year, which tends to reduce the supply of the currency and drive up prices. But the most pessimistic view from JPMorgan analysts is that the quadrennial event has been "well factored" into the current price, and the coin will not recover after the halving.
โInstead, we are looking for a drop of around 20% in hash rate after the halving, as miners in higher cost locations or with less efficient hardware would be forced out of the market,โ they wrote. "This scenario would be more consistent with a bitcoin price of around $35,000 after the halving."
Read the original article at Business Insider
