In its report, JPMorgan forecasts that Ethereum will outperform Bitcoin in the coming year while emphasizing the need for a more cautious approach in the cryptocurrency markets.
Ethereum’s Rise Dependent on New Update
JPMorgan analysts expect that with its next upgrade, EIP-4844, Ethereum’s blockchain will perform better than Bitcoin and other cryptocurrencies in the coming year.
The EIP-4844 upgrade of Ethereum is set to significantly improve the network’s efficiency by increasing the scalability of ether. Analysts anticipate this potential rise in Ethereum will create positive effects, especially for Layer 2 networks such as Arbitrum $ARB and Optimism $OP, attracting more users by reducing transaction fees.
“ETFs Already Priced In”
On the other hand, emphasizing the significance of the upcoming year for Bitcoin, JPMorgan has reported on the potential impact of the SEC’s approval of spot Bitcoin exchange-traded funds (ETFs) on the markets.
“The excessive optimism among crypto investors, driven by the expectation of the SEC’s imminent approval of spot Bitcoin ETFs, has pushed Bitcoin to the buying levels seen in 2021.”
JPMorgan analysts indicate that the potential approval of ETFs and the approaching halving event’s impact on Bitcoin prices are already priced in. They predict that if the SEC approves spot Bitcoin ETFs, it could lead to a “sell the news” effect.