JPMorgan: Bitcoin ETF’s impact overstated, Ethereum set to surprise skeptics

A report from America’s largest bank said spot Bitcoin ETF flows in Canada and Europe hint at what to expect in the U.S., adding that upcoming Ethereum upgrades beckon more interest in ETH.

Analysts at JPMorgan foresee a lackluster performance from spot Bitcoin ETFs should the U.S. Securities and Exchange Commission (SEC) approve applications from some 13 issuers in early 2024. Also, the Bitcoin (BTC) halving is already priced in and will likely have no further price impact, according to Chase Bank. 

The report’s prediction pivoted from general crypto-native sentiment, which has espoused bullish remarks amid hopes of billion-dollar inflows into BTC following the SEC’s potential nod. 

Instead, JPMorgan opined that successfully launching spot BTC ETFs would divert capital from existing Bitcoin-based products like futures ETFs, mining operations, and Grayscale’s Bitcoin Trust (GBTC).

The heavyweight bank also said GBTC’s conversion into a spot ETF could induce $2.7 billion worth of sell pressure from long-standing Grayscale customer looking to cash in early on their faith in the company. 

VeChain CEO Sunny Lu said crypto regulations would likely impact the markets more than BTC’s halving. However, Lu argued that an ETF decision should not be understated.

The impact regulation is having on the market is becoming more significant than the impact of Bitcoin halving. The attention of the entire crypto market is on ETF progress for Bitcoin spot, which I believe may be the biggest milestone in bitcoin and crypto’s history.

Sunny Lu, VeChain CEO

Ethereum to trump Bitcoin ETFs

Regarding Ethereum (ETH), crypto’s second-largest asset and blockchain, JPMorgan analysts believe the digital currency will outclass BTC and Bitcoin ETFs in 2024. The bank supported this assertion by citing forthcoming technological upgrades to reduce gas fees and boost throughput.

The upgrades are part of  EIP-4844, an Ethereum improvement proposal focused on proto-danksharding.

We believe that next year Ethereum will re-assert itself and recapture market share within the crypto ecosystem.

JPMorgan Analysts

JPMorgan researchers shared these thoughts weeks before January 2024, when some believe the SEC could approve the first batch of spot Bitcoin ETFs. SEC chairman Gary Gensler recently dodged answering questions on the subject, while experts surmised that approvals are a matter of when, not if.