Ethereum will surpass Bitcoin by 2024, says JPMorgan

Analysts at the world's largest bank expect Ethereum (ETH) to surpass Bitcoin (BTC) next year.

In a report published on Wednesday, JPMorgan argued that Ethereum's upcoming “Protodanksharding” (EIP-4844) upgrade will help Ether (ETH) boost network activity after a period of underperforming other cryptos.

The coming return of Ethereum

Protodanksharding, expected for April, marks the first stage before the full implementation of “danksharding” – a scaling technique that strengthens Ethereum's Layer 2 networks with more transaction flow and lower fees.

Analysts led by Nikolaos Panigirtzoglou wrote in a report with Cryptopotato that “We look for Ethereum to outperform Bitcoin and other cryptocurrencies next year, aided by the upcoming EIP-4844 update or protodansharding.”

The prediction echoes that of British banking giant Standard Chartered, which predicted an 8000 ETH price of 8000 ETH in October, driven in part by technical improvements such as Danksharding.

So far, JPMorgan has described Ethereum's network activity as disappointing. Despite the resurgence of DeFi and NFTs on other networks since the Shanghai reform in April, the movement has not seen a meaningful resurgence beyond staking.

One of such alternative networks is Bitcoin, which is a new platform for NFTs and tokenization thanks to the newly popular ordinal protocol. In times of high activity, transaction fees collected by Bitcoin are starting to compete with Ethereum.

Bitcoin VS Ethereum

In price action, BTC is up 158% year to date, while ETH is up 90%. However, according to JPMorgan, the previous outperformance is not expected to last – despite major events that are expected to drive further gains.

The analysts argued that “crypto investors' over-optimism over the impending SEC approval of spot bitcoin ETFs has pushed bitcoin back to overbought levels seen in 2021.”

Although many believe that a series of Bitcoin ETF approvals will invite more institutional capital into BTC, the bank believes that capital will easily shift from existing Bitcoin investment vehicles, such as grayscale, futures ETFs, mining companies and others.

As for the Bitcoin halving in April, JPMorgan said the event was pre-awarded based on the price of BTC produced by miners.

“The current Bitcoin price to producer price ratio is around x2.0, indicating that the 2024 Bitcoin halving event is in the price range,” the analysts wrote.