In addition to their “cautious” outlook for the industry in the coming year, JP Morgan has predicted that Ethereum (ETH) will surpass Bitcoin (BTC) in 2024 in total number of Bitcoin tokens in circulation.
Ultimately, JP Morgan has pointed out that “excessive optimism” will work against Bitcoin in the coming year. Additionally, analysts at the institution have noted that the aforementioned halving event is “largely priced into the current value of the asset.” Therefore, they do not expect any huge increases next year.
Also Read: How Many Times Was Bitcoin Declared Dead in 2023?
JP Morgan not excited about Bitcoin’s prospects in 2024?
For much of 2022 and the start of the following year, Bitcoin struggled in the mainstream. In fact, the entire industry experienced a crypto winter where there were numerous concerns about its ability to bounce back. Now, with just a month to go until 2024, excitement surrounding the asset has never been greater.
Anticipation of possible Spot Bitcoin ETF approval and the upcoming halving have led to excitement about its potential. However, one bank is not so optimistic about the overall positive development of crypto next year. JP Morgan has stated that Ethereum could surpass Bitcoin in 2024.
Also Read: JP Morgan Predicts S&P 500 to Plunge 25%: Here's How to Find Out When
The bank released an outlook for the coming year that it described as “cautious” given a variety of factors. In particular, they have cited the potential for excessive excitement that could ultimately harm Bitcoin. This subsequently caused the asset to become overbought in a market that had already factored in the upcoming halving.
JP Morgan highlighted how the halving will impact miners. In fact, they noted that production costs are expected to double due to current hash rates and the difficulty of Bitcoin mining. Additionally, they predicted a 20% drop in hash rate, which would cause excessive cost miners to exit the market altogether. Additionally, they stated that expectations of capital inflows into spot Bitcoin ETF products were exaggerated.
Conversely, they discussed Ethereum’s upcoming EIP-4844 “Proto-Dank Sharding” upgrade. In particular, they discussed the possible impact on the asset's performance in the coming year. However, they have still expressed concern about centralized staking on the Ethereum network. If JP Morgan is right about its Bitcoin concerns, the asset could struggle to live up to the hype.
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