Analysts from JPMorgan, one of the biggest asset management and finance firms, believe that Ethereum (ETH) will likely outperform Bitcoin next year.
Nikolaos Panigirtzoglou, a Managing Director and Digital Assets analyst at JPMorgan, shared a note predicting that Ethereum will recapture its market share within the crypto ecosystem in the upcoming year.
“The main catalyst is the EIP-4844 upgrade or Protodanksharding, which is expected to take place during the first half of 2024,” said Nikolaos. “We believe that this upgrade will likely prove a bigger step towards improving Ethereum network activity, thus helping Ethereum to outperform.”
As the Ethereum network is continuously going through major fundamental upgrades, Proto-Danksharding is also one of the changes anticipated by Ethereum developers. It is an initial step for the implementation of Danksharding which introduces blobs to store data and improve block capacity temporarily until EVM execution.
JPMorgan analysts say that this upgrade is very beneficial for Ethereum layer 2 networks such as Optimism and Arbitrum, as it improves network throughput while reducing fees.
While referring to the bullish stance for Bitcoin, analysts said that the driving factors – such as optimism around spot Bitcoin ETFs and upcoming halving in April 2024 – are already priced in, hence a huge upsurge in Bitcoin price is blurry.
“Given the current ratio of the bitcoin price to production cost is around x2.0 at the moment, this would imply that the 2024 bitcoin halving event is largely in the price,” said analysts.
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