The global financial giant JPMorgan has released a cautiously optimistic outlook for the cryptocurrency market in 2024, predicting that while broader crypto gains may be limited, Ethereum (ETH) is poised to outshine Bitcoin (BTC) and other digital assets due to upcoming network upgrades. Despite rising investor enthusiasm, the bank warns of potential market fatigue following key milestones like the anticipated approval of a spot Bitcoin ETF and the next Bitcoin halving event.
Market Sentiment Ahead of Key Crypto Milestones
JPMorgan analysts, led by Nikolaos Panigirtzoglou, suggest that much of the bullish momentum in the crypto market has already been priced in. In a recent report, they highlighted that "excessive optimism" among investors regarding the U.S. Securities and Exchange Commission’s (SEC) potential approval of a spot Bitcoin ETF could lead to a classic "buy the rumor, sell the news" scenario.
“Once the SEC approves a spot Bitcoin ETF early next year, there’s a strong possibility of profit-taking,” the report stated.
This sentiment aligns with technical observations showing Bitcoin reaching overbought levels last seen during the 2021 bull run, indicating that short-term upside may be constrained. Additionally, the upcoming Bitcoin halving in 2024, which historically reduces new supply and fuels price rallies, appears to have been largely priced into the market already.
Why Ethereum Could Lead the Next Phase
While Bitcoin's momentum may stall, JPMorgan sees stronger fundamentals driving Ethereum’s potential outperformance. The key catalyst? The highly anticipated EIP-4844 upgrade, also known as proto-danksharding.
This upgrade is a critical step toward scaling Ethereum by improving data availability and reducing transaction costs—especially for Layer-2 networks like Optimism and Arbitrum. EIP-4844 introduces a new transaction type called "blob-carrying transactions", which allow large volumes of data to be temporarily stored on-chain at a lower cost. This innovation significantly enhances network efficiency without compromising decentralization or security.
How Proto-Danksharding Works
- Blob-carrying transactions carry off-chain data that Layer-2 rollups need to verify transactions.
- These blobs are stored for only ~18 days, reducing long-term storage burden on validators.
- Lower data costs translate into cheaper Layer-2 fees, making Ethereum more accessible for everyday users.
This upgrade paves the way for Danksharding, a future scaling solution that will further increase data throughput by sharding the network—splitting it into smaller, parallel-processing units. Sharding aims to solve Ethereum’s long-standing challenge of congestion and high gas fees during peak usage.
Venture Capital and DeFi Trends in Late 2023
JPMorgan also analyzed broader ecosystem trends, noting a modest rebound in venture capital (VC) funding during Q4 2023. However, the bank described this recovery as “cautious,” reflecting investor wariness amid regulatory uncertainty and macroeconomic pressures.
Decentralized Finance (DeFi) activity has shown signs of improvement, with total value locked (TVL) gradually rising across major protocols. Yet, one major hurdle remains unaddressed:
“The biggest disappointment is still DeFi’s inability to integrate with traditional finance (TradFi), which is essential for the crypto ecosystem to transition from crypto-native applications to real-world use cases.”
Without deeper integration into traditional financial systems—such as banking infrastructure, asset tokenization platforms, or compliance frameworks—DeFi risks remaining a parallel economy rather than a transformative force.
👉 Explore how next-gen blockchain upgrades are bridging DeFi and traditional finance.
Core Keywords Driving Market Evolution
To understand where the market is headed, it's important to track the foundational concepts shaping its trajectory:
- Ethereum (ETH)
- Bitcoin (BTC)
- EIP-4844
- Proto-danksharding
- Spot Bitcoin ETF
- Crypto market 2024
- Layer-2 scaling
- DeFi integration
These keywords reflect both technical developments and macro-level shifts influencing investor behavior and institutional adoption.
Frequently Asked Questions (FAQ)
Q: Why does JPMorgan expect Ethereum to outperform Bitcoin in 2024?
A: JPMorgan cites Ethereum’s EIP-4844 upgrade as a key differentiator. By enabling cheaper and faster transactions through blob-carrying transactions and improved Layer-2 scalability, Ethereum is better positioned for real-world adoption compared to Bitcoin, which lacks similar near-term technical catalysts.
Q: What is the “buy the rumor, sell the news” effect in crypto markets?
A: This phenomenon occurs when traders buy an asset in anticipation of a positive event (like an ETF approval), driving up prices prematurely. Once the event happens, many investors take profits, causing prices to drop despite good news.
Q: How does EIP-4844 improve Ethereum’s scalability?
A: EIP-4844 introduces blob-carrying transactions that reduce data load on the main chain. This lowers costs for Layer-2 rollups, making them more efficient and scalable—critical steps toward supporting mass adoption.
Q: Is the Bitcoin halving already priced into the market?
A: According to JPMorgan, yes. Historical patterns show that halvings often trigger bull runs, but current market conditions suggest that expectations around the 2024 halving have already influenced Bitcoin’s price trajectory.
Q: Can DeFi succeed without integrating with traditional finance?
A: While DeFi can operate independently, long-term success depends on interoperability with traditional financial systems. Integration enables use cases like tokenized stocks, real estate, and regulated lending—bridging crypto with mainstream finance.
Q: What role do venture capital flows play in crypto innovation?
A: VC funding fuels early-stage development of protocols, infrastructure, and applications. A cautious rebound in Q4 2023 suggests confidence is returning—but sustained investment will depend on clearer regulations and proven revenue models.
Looking Ahead: From Hype to Real-World Utility
While speculative excitement often drives short-term price movements, lasting value comes from technological progress and practical adoption. Ethereum’s roadmap—with EIP-4844 as a cornerstone—positions it as a platform capable of supporting scalable, secure, and cost-effective decentralized applications.
Meanwhile, Bitcoin’s narrative remains tied to macro factors like ETF approvals and monetary policy, offering limited upside once those events materialize. For investors seeking growth beyond speculation, Ethereum’s upgrade cycle presents a compelling opportunity.
👉 Stay ahead of the curve—learn how protocol upgrades are reshaping digital asset performance.
As the crypto market evolves in 2025 and beyond, the focus will increasingly shift from price volatility to real-world utility, interoperability, and infrastructure maturity. Institutions like JPMorgan recognizing these shifts signals a maturing ecosystem—one where technical innovation drives sustainable value rather than fleeting hype.