Key Insights
- JPMorgan expects Ethereum to outperform on upgrades improving base layer and Layer 2 efficiency
- Bank sees Bitcoin already reflecting dynamics like 2024 halving and spot ETF hopes
- But structural and economic obstacles still hinder mainstream crypto adoption per analysts
JPMorgan has gazed into its crystal ball, envisioning an Ethereum breakout while casting clouds over Bitcoin’s upside next year. But the bank warns macro mists may still choke mass adoption.
Specifically, JPMorgan sees the implementation of Protodanksharding in the first half of 2023 as a catalyst for Ethereum to recapture market share. By introducing data blobs to increase temporary data capacity without altering block size, Protodanksharding enhances Layer 2 throughput and reduces transaction fees. Chains like Arbitrum and Optimism riding on Ethereum stand to benefit greatly.
Compare this to rather muted 2023 drivers for Bitcoin. JPMorgan says dynamics projected to spur prices like spot ETF approval and the 2024 halving are already reflected with the crypto trading around 2x production costs presently. History suggests the halving premium could erode post-event.
Read also! Which Cryptos Will Boom If Bitcoin ETF Approved in 2024?
So Ethereum’s developer momentum appears superior, with network effects likely expanding via Layer 2 scaling boosts. However, the bank does not see a broader decentralized finance breakout ensuing because issues like tri-party interoperability, compliance integration, and regulatory clarity remain lacking.
Moreover, the tentative recovery in crypto venture funding into early 2023 remains at risk if macro conditions worsen. JPMorgan says only a durable rebound sets the stage for thawing the crypto winter completely.
Read also! Ethereum’s Price May Surge to $8,000 by 2026, Says Standard Chartered Bank
In totality, Ethereum looks primed to gain market cap influence next year, while Bitcoin consolidates off an already-steep 2022 advance. But the industry must still overcome structural and economic challenges before mass adoption can take root. Risks linger per JPMorgan.