J.P. Morgan Analysts Expect Ethereum to Outperform Bitcoin in 2024
by Oskar Trotman
J.P. Morgan analysts are starting to create waves in the crypto industry after publishing a note on Wednesday, sharing their assessment that Ethereum will dethrone Bitcoin in 2024. The bold prediction made by experts at this U.S. financial institution stems from high expectations for the forthcoming upgrade of Ethereum’s network, referred to as Protodanksharding, set to be implemented in the first half of 202.
The upgrade will significantly boost the network’s capacity, enhancing the number of transactions processed in a second and, equally importantly, reducing the cost of operations. According to experts, these changes are not routine but rather substantial network improvements, enabling Ethereum to recapture its share of the crypto market, which is experiencing a resurgence in price and activity.
Ethereum’s value has risen by 90%, compared to its price at the start of 2023, and is currently at $2,270. However, it’s still not rivaling Bitcoin, a dominant market leader, experiencing a price spike of 154% in 2023.
The Technical Side of the Argument
The highly touted upgrade bears a technical designation of EIP-4844, more commonly known as Protodanksharding, and represents a more efficient version of Dankshardings, the method that makes Ethereum a scalable blockchain. Protodanksharding is a way for rollups to add cheaper data to blocks and scale the network up to over 100,000 transactions per second.
Compared to the original sharding technique, Protodanksharding will introduce data blobs that can handle greater data capacity, and the data in these blobs is deleted automatically after a fixed time. The result is cheaper transactions for end users.
The J.P. Morgan analysts claim the upgrade is advantageous to Layer 2 networks by creating extra temporary data space and reducing transaction fees on Ethereum. In a nutshell, data blobs will enhance the productivity of Layer 2 networks without changing the size of an Ethereum.
Crypto Optimism or Fair Assessment
J.P. Morgan analysts are not convinced that recent bullish Bitcoin trends are sustainable. They believe that crypto is not experiencing an influx of fresh capital. According to them, the current situation is fueled by redistributing funds from other digital assets.
Another reason for increased interest in Bitcoin is the halving event on the calendar for April 2024, which will cause a rise in price after a reduction of supply. In their evaluation, the J.P. Morgan analysts have considered the quadrennial event and think Bitcoin will not rally post-halving.
Their analysis is partly based on historical trends and points to the 2020 halving as an example, when the market price and production cost decreased, with a similar development expected for 2024. Ethereum can be well poised to compete with Bitcoin on a more equal market footing in 2024, especially if the proposed regulatory and legal framework progresses in a favorable direction.
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