As the cryptocurrency market continues to evolve, JPMorgan analysts have taken a cautious stance. However, they are predicting that Ethereum (ETH) will surpass Bitcoin (BTC) and other digital currencies in terms of market price performance by 2024. This unique perspective within the institution highlights the analysts’ optimism for Ethereum and its potential compared to other digital assets. Despite an overall cautious sentiment towards the crypto landscape, the JPMorgan analysts believe Ethereum will reclaim its prominence and regain market share in the coming year.
The JPMorgan analysts emphasize the importance of the EIP-4844 upgrade, also known as Protodanksharding, as the primary catalyst for Ethereum’s anticipated resurgence. This significant upgrade, scheduled for implementation in the first half of 2024, is expected to bring substantial improvements to Ethereum’s network activity. Danksharding, a more efficient sharding method for Ethereum, is introduced through protodanksharding. This approach bypasses the lengthy process of dividing Ethereum into several shard chains, as initially intended. Instead, data blobs are introduced, which are connected to blocks and can hold more data than blocks. However, they are not permanently stored or accessible by the Ethereum virtual engine.
JPMorgan’s optimistic forecast aligns with Standard Chartered’s outlook, as they also predict a surge in Ether’s price within a few years. Geoff Kendrick, the Head of FX Research, West, and Digital Assets Research, suggests that Ether’s upward trajectory may be more gradual than that of Bitcoin. Despite the potentially longer timeframe, Kendrick believes that Ethereum will eventually achieve a higher price multiple compared to Bitcoin. He expects Ethereum to reach a price multiple of 5.0x, surpassing Bitcoin’s expected 3.5x multiple.
According to JPMorgan analysts, the upgrade would benefit Layer 2 networks, such as Optimism (OP) and Arbitrum (ARB), the most. These Layer 2 networks would experience increased temporary data space, resulting in improved network throughput and decreased transaction fees. The introduction of data blobs enhances the efficiency of Layer 2 networks without affecting the size of an Ethereum block.
As Ethereum continues to find new applications, the demand for Ether is expected to rise. One of the most common use cases for Ethereum is NFT transactions, which are predicted to grow in popularity according to Geoff Kendrick. As of the time of writing, Ether was trading at $2,281, showing a 5.0% increase in the last 24 hours. In comparison, Bitcoin was trading at $42,910, with a 2.3% increase in the same timeframe.
While maintaining caution towards the overall cryptocurrency market, JPMorgan analysts have expressed optimism regarding Ethereum’s future performance. With the upcoming EIP-4844 upgrade and its potential benefits for Layer 2 networks, analysts predict Ethereum will outperform Bitcoin by 2024. Standard Chartered has also shared a similar optimistic outlook for Ether’s price. However, it is essential to note that investing in cryptocurrencies carries risks, and readers are advised to conduct their own research before making any investment decisions.