JP Morgan, in a rather cautious industry outlook for the upcoming year, has made a bold prediction that Ethereum (ETH) is poised to outshine Bitcoin (BTC) in 2024. This projection comes despite the impending halving event for Bitcoin, which is expected to reduce the total circulating tokens.
JP Morgan attributes this prediction to the perceived “excessive optimism” working against Bitcoin in the coming year. Analysts from the financial institution highlight the significant impact of the upcoming halving event, suggesting that its influence is already deeply embedded in the current value of the asset, dampening expectations for a substantial increase in the next year.
Bitcoin’s Struggles and Ethereum’s Potential Takeover
Bitcoin faced challenges gaining mainstream acceptance throughout 2022, contributing to concerns about the cryptocurrency’s ability to recover from a prolonged crypto winter. As 2024 approaches, the excitement surrounding Bitcoin has surged, fueled by expectations of potential approval for the Spot Bitcoin ETF and the looming halving event.
JP Morgan, however, takes a less optimistic stance on Bitcoin’s performance in the coming year. The financial giant emphasizes Ethereum’s potential to surpass Bitcoin in 2024, as outlined in their cautious forecast for the industry. The warning revolves around the danger of overexcitement leading to an overbought asset, particularly with the halving event already factored into the market.
JP Morgan’s Concerns for Bitcoin and Ethereum’s Edge
JP Morgan underlines the potential impact of the halving event on Bitcoin miners, forecasting a doubling of production costs based on current hash rates and mining difficulty. They predict a 20% decrease in hash rates, which could force over-costed miners out of the market. The bank also dismisses exaggerated expectations of capital inflows into Spot Bitcoin ETF products.
On the flip side, JP Morgan acknowledges Ethereum’s potential with the upcoming EIP-4844 “Proto-dank sharding” update, despite expressing concerns about centralized mining on the Ethereum network. If JP Morgan’s cautionary outlook on Bitcoin holds true, Ethereum might indeed outperform expectations, ushering in a transformative shift in the cryptocurrency landscape.
Source: Watcher Guru