Is Ethereum Set to Outperform Bitcoin in the Cryptocurrency Market?

Is Ethereum Set to Outperform Bitcoin in the Cryptocurrency Market?

JPMorgan analysts have recently expressed a bullish outlook for Ethereum (ETH), predicting that it will surpass Bitcoin (BTC) and other digital currencies in terms of market price performance by 2024. This perspective stands out within the institution, as JPMorgan maintains an overall cautious stance on the cryptocurrency market. Despite the cautious sentiment towards the broader crypto landscape, the analysts see unique potential and favorable prospects for Ethereum.

One primary catalyst for Ethereum’s anticipated resurgence is the EIP-4844 upgrade, also known as Protodanksharding, scheduled for implementation in the first half of 2024. This crucial upgrade is expected to bring substantial improvements to Ethereum’s network activity. Protodanksharding introduces a more efficient sharding method called Danksharding, which sidesteps the tedious procedure of dividing Ethereum into several shard chains. Additionally, the upgrade introduces data blobs, which can hold more data than blocks but are not permanently stored or accessible by the Ethereum virtual engine.

JPMorgan’s optimistic forecast for Ethereum aligns with Standard Chartered’s previous statement that Ether could experience a 400% surge within a few years, followed by a more sustained upward movement towards $35,000. Geoff Kendrick, the Head of FX Research, West, and Digital Assets Research, believes that Ethereum’s upward trajectory might unfold at a more gradual pace compared to Bitcoin. However, Kendrick envisions Ethereum eventually surpassing Bitcoin in terms of market price multiple. He anticipates Ethereum reaching a price multiple of 5.0x, while Bitcoin is expected to achieve only a 3.5x multiple.

According to the JPMorgan analysts, Layer 2 networks, such as Optimism (OP) and Arbitrum (ARB), would gain the most from the EIP-4844 upgrade. These Layer 2 networks would benefit from the increased temporary data space, which would improve network throughput and reduce transaction fees. The introduction of data blobs enhances the efficiency of Layer 2 networks without changing the size of an Ethereum block.

As Ethereum continues to discover new applications, the demand for it is expected to rise. One of the most prominent use cases for Ethereum is NFT transactions, which are predicted to grow significantly. As a result, cryptocurrency-related trends are set to expand further, contributing to the overall growth of Ethereum.

In the current market, Ether is trading at $2,281, experiencing a 5.0% increase in the last 24 hours, while Bitcoin is valued at $42,910, with a 2.3% increase in the same timeframe.

While maintaining caution in the cryptocurrency market, JPMorgan analysts foresee Ethereum outperforming Bitcoin and other digital currencies by 2024. Their bullish outlook is based on Ethereum’s unique potential and favorable prospects, particularly driven by the forthcoming EIP-4844 upgrade. The upgrade’s improvements, including the introduction of Danksharding and data blobs, are expected to enhance Ethereum’s network activity, benefit Layer 2 networks, and cater to the growing demand for Ethereum’s applications. As the crypto landscape continues to evolve, it will be interesting to observe how Ethereum positions itself and whether it will fulfill the analysts’ optimistic forecast.

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