“Ethereum is expected to rise faster than Bitcoin,” JP Morgan 2024 analysis says

Pay attention to the major upgrade of Ethereum

Analysts at US financial giant JP Morgan have expressed the view that Ethereum is likely to outperform Bitcoin and other major crypto assets (virtual currencies) in 2024. This was reported by overseas virtual currency media The Block.

This prediction is based on the implementation of EIP-4844, which will be included in the major Ethereum (ETH) upgrade “Dencun” scheduled for 2024.

An analysis by JPMorgan’s analyst team led by Nikolaos Panigirtzoglou found that there are factors that will be bullish on Bitcoin next year, such as the possibility of approval of a spot ETF (exchange traded fund) and the arrival of the halving. takes the position that it is already factored into market prices.

Meanwhile, our analyst team expects Ethereum to regain its share within the cryptocurrency ecosystem and take the lead again next year.

Proto-dunk sharding is an important step in increasing Ethereum’s processing power, and is expected to significantly improve the efficiency of the L2 network and reduce transaction costs.

Source: CoinMarketCap

The highest share of Ethereum was 20% in August 2021, and at the time of writing, ETH’s market capitalization share was 16.9%.

DeFi challenges

Meanwhile, analysts at JPMorgan said they believe decentralized finance (DeFi) has failed to penetrate the traditional financial system. Companies such as Broadridge and JP Morgan are experimenting with financial transactions using smart contracts, but they point out that most of them are done on private chains.

Furthermore, regarding the tokenization of “real assets (RWA)” such as bonds, which has been attracting attention recently, he describes it as “slowly evolving, but is still in the experimental stage,” adding, “Fragmentation between platforms Factors such as “lack of cooperation and interoperability, slow adoption of central bank digital currencies by the Federal Reserve (Fed) and European Central Bank (ECB), and lack of regulation” are hindering the progress of this RWA tokenization. He said there was.

connection:JP Morgan uses Avalanche for RWA proof of concept AVAX +22% from previous day

What is EIP-4844?

Proto-dunk sharding is a step towards implementing Ethereum sharding technology, specifically a new form called “dunk sharding.” Sharding is a technology that splits blockchain data into multiple parts, which increases the processing power of the Ethereum network.

Traditional sharding was a plan to split Ethereum into multiple smaller chains called shard chains. Proto-dunk sharding, on the other hand, avoids such complex partitioning and instead introduces temporary data packets called “data blobs.” Data blobs are attached to blocks and hold more data, but are not permanently stored by Ethereum’s virtual machine.

Via data blobs, data transfer from L2 to Ethereum’s main blockchain (Layer 1, L1) is facilitated, which significantly reduces L2 transaction fees, making it easier for Arbitrum (ARB) and Optimism (OP ) and other Layer 2 (L2) networks will greatly benefit from this upgrade.

EIP-4844 is a concrete improvement proposal for proto-dunk sharding. Ethereum’s next major upgrade, “Dencun,” which implements EIP-4844, is scheduled to begin upgrading the Ethereum public testnet in the first quarter of 2024, and the mainnet launch is expected to occur around the same time or later.

connection:Ethereum major upgrade “Dencun” will be carried over to 2024?

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