JPMorgan analysts expect Ethereum will surpass Bitcoin and other cryptocurrencies with a grain of salt next year. Led by Nikolaos Panigirtzoglou and other leading analysts, it is predicted that the resurgence of Ethereum will occur in 2024 with the implementation of the so-called Protodanksharding, or EIP-48.
Protodanksharding is a precursor to Danksharding, offering a more efficient form of sharding for Ethereum. This upgrade sidesteps the complexities of shard chains by introducing data blobs—temporary packets within blocks. These data blobs enhance the Ethereum network’s efficiency without permanently altering the block size, benefiting Layer 2 networks like Arbitrum and Optimism.
Moreover, JPMorgan emphasizes the positive impact of Protodanksharding on Layer 2 networks, as it provides additional temporary data space, boosting network throughput and reducing transaction fees. The analysts believe this upgrade positions Ethereum for outperformance in the crypto ecosystem.
Furthermore, JPMorgan deems Bitcoin’s bullish factors for 2024, such as potential ETF approvals and the upcoming halving, already factored into its current price. They draw parallels between the 2020 halving and the anticipated 2024 event, suggesting a rational expectation for a similar market response.
JPMorgan: DeFi Challenges, Crypto Industry Optimism
JPMorgan’s analysis extends beyond individual cryptocurrencies to the broader crypto landscape. They highlight the persistent challenge facing decentralized finance (DeFi) in integrating with traditional finance.
Despite potential applications, like smart contract-based overnight repo transactions, these processes largely occur outside public blockchains. Tokenization, too, progresses slowly due to fragmentation, lack of cooperation, central bank digital currency delays, and regulatory uncertainties.
Moreover, while there’s a noted improvement in venture capital funding in crypto during the fourth quarter, JPMorgan remains cautiously optimistic. They see this improvement as a tentative sign, with a potential continuation into the first quarter of 2024 signaling a noteworthy shift—the end of the crypto winter and a significant development for the industry.
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Furthermore, the author’s views are for reference only and shall not constitute investment advice. Before purchasing, please ensure you fully understand and assess the products and associated risks.
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