Cryptocurrencies close a great year of recovery. JPMorgan produced a report detailing the catalysts that could drive its price.
The cryptocurrencies They are in an optimistic moment. With the Bitcoin above US$40,000, digital assets managed to recover levels prior to the bankruptcies of large companies that occurred in 2022 and face the year 2024 with some catalysts, such as the possible approval of Bitcoin exchange-traded funds or the “halving” of the Bitcoin network scheduled for next April. However, for JPMorgan experts there will not be as much potential as expected.
In a recent report, strategists of the new york bank say bitcoin spot ETFs are “likely” not to provide the support believed by most analysts, who have predicted strong gains for a leading cryptocurrency that could reach new all-time highs thanks to these investment products.
According to JPMorgan, there is a “high probability that un rumor buy/sell effect of the fact once the SEC approves bitcoin spot ETFs early next year.”
“The excessive crypto investor optimism derived from an imminent approval of the bitcoin ETF spot by the SEC has moved bitcoin to the overbought levels seen during 2021,” these experts stated, while highlighting that the 2024 bitcoin halving event is “heavily discounted.”
What JPMorgan expects for Ethereum
Instead, the New York firm has been more optimistic about the future of the Ethereum (ETH), which could also see approval a series of spot ETFs in the coming months. According to JPM, it is “likely” that ETH “will shine due to the EIP-4844 update or proto-danksharding.” “This is a development of sharding (dividing the network into shards to improve transaction speed) through sharding, which uses shards to increase space for groups of data. Proto-danksharding involves adding a new type transaction to Ethereum: the “blob transport transaction,” they claimed.
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Courtesy: BeInCrypto
It should be noted that JPMorgan has been very critical of the latest update of the Ethereum network, which they called “disappointing” due to the resulting increased centralization. According to these experts, centralization by any entity or protocol creates risks for Ethereumas a “concentrated number of liquidity providers or node operators could act as a single point of failure or become the target of attacks or collude to create an oligopoly that would promote their own interests at the expense of the interests of the community.”
On the other hand, the bank notes that there has been some “reactivation” in venture capital financing in the fourth quarter of 2023, although it seems “rather tentative.” Furthermore, they highlight that, although there has been some improvement in decentralized finance (DeFi) activity, The “biggest disappointment continues to be the inability to invade the traditional financial system, which is necessary for the crypto ecosystem to be applied to the real world,” they stated.
Source: Ambito
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