Analysts at JPMorgan Chase (JPM) see limited upside for Bitcoin (BTC) in 2024 and expect the largest cryptocurrency by market capitalization to decline over the coming year.
Bitcoin’s price has gained more than 50% since October and is currently near its highest level since April 2020. Year-to-date, Bitcoin’s price has risen 159% to trade at $43,000 U.S.
However, analysts at JPMorgan don’t expect Bitcoin’s bull run to continue in 2024, saying that several positive factors are already priced into the cryptocurrency.
While investors continue to bid up Bitcoin in anticipation that the U.S. Securities and Exchange Commission (SEC) will soon approve Bitcoin exchange-traded funds (ETFs), analysts at JPMorgan are skeptical about the overall impact of such a move.
“Excessive optimism by crypto investors arising from an impending approval of spot Bitcoin ETFs by the SEC has shifted Bitcoin to the overbought levels seen during 2021,” writes JPMorgan in its crypto outlook.
Instead of new capital entering Bitcoin through spot ETFs, it’s more likely that capital will be shifted around within crypto doing little to boost prices, says JPMorgan.
The analysts point out that spot Bitcoin ETFs already exist in Canada and have attracted little interest from investors.
JPMorgan is also not expecting much from the Bitcoin halving event that’s taking place in early 2024, which is a programmatic change that will limit new issuance of Bitcoin and is widely expected to boost its price.
“The Bitcoin halving event and its effect are predictable and in our opinion are well factored into the current Bitcoin price,” says JPMorgan.
Lastly, JPMorgan reiterated its view that Ethereum (ETH) will outperform Bitcoin and other cryptocurrencies in 2024.
The analysts anticipate that Ethereum will benefit from a key upgrade known as the “proto-Danksharding” in the first half of next year.
Ethereum’s price has increased 86% in 2023 to trade at $2,236 U.S. per token.
