JPMorgan Is Cautious About Crypto Markets Into 2024

Ether is expected to outperform bitcoin and other cryptocurrencies next year due to the Ethereum blockchain’s EIP-4844 upgrade, the report said.

AccessTimeIconDec 14, 2023 at 8:59 a.m. UTC
Updated Mar 8, 2024 at 6:40 p.m. UTC

Wall Street giant JPMorgan (JPM) said it is cautious about cryptocurrency markets into 2024, but expects ether (ETH) to outperform bitcoin (BTC) and other cryptocurrencies due to an upgrade that will make the Ethereum blockchain more scalable.

The U.S. Securities and Exchange Commission's (SEC) decision on whether to approve spot bitcoin exchange-traded-funds (ETFs) is unlikely to spur major gains, it said in a report on Wednesday.

There is a “high chance of buy-the-rumor/sell-the-fact effect once the SEC approves spot bitcoin ETFs early next year,” analysts led by Nikolaos Panigirtzoglou wrote.

“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 said, adding that the 2024 bitcoin halving event is “largely priced in.”

Ether is likely to shine due to the EIP-4844 upgrade, or proto-danksharding. That's a development of sharding – splitting the network into shards to improve transaction speed – by way of Danksharding, which uses the shards to increase space for groups of data. Proto-danksharding involves adding a new transaction type to Ethereum: the “blob-carrying transaction.”

The bank notes that there has been some “reinvigoration” in venture capital (VC) funding in the fourth quarter of 2023, but it appears “rather tentative.”

While there has been some improvement in decentralized finance (DeFi) activity, the “biggest disappointment continues to be the inability of DeFi to encroach into the traditional financial system, which is necessary for the crypto ecosystem to transition from crypto native to real world applications,” the report added.

Edited by Sheldon Reback.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Author placeholder image

Will Canny is CoinDesk's finance reporter.