"Are you serious? Investors must be nervous listening to JPMorgan's words?"
JPMorgan, the multinational financial services firm of the United States (US) that presents a cautious attitude towards the cryptocurrency market has predicted that Ethereum (ETH) will surpass Bitcoin (BTC) in 2024 even though the halving event is getting closer.
This is because there is an EIP-4844 ETH update or better known as "Proto-dank sharding" which is expected to further increase the efficiency and scalability of the ETH network and give it an advantage in the crypto market.
A halving that reduces new BTC mining rewards may increase production costs then lead to a 20% drop in hash rate, JPMorgan commented, adding this could lead to higher operating costs for miners.
According to JPMorgan analysts, overconfidence in BTC and capital inflows into BTC ETF spot products have made the digital asset increasingly risky in the crypto market which could disappoint investors in the future.
It is well known that mining can result in a halving event doubling the mining cost based on the current hash rate including BTC mining difficulty.
The increase in costs combined with a predicted drop in hash rate may force miners to incur excessive operating costs further impacting the entire BTC ecosystem.
However, it should be noted that JPMorgan also expressed its concerns about ETH's centralized staking mechanism, where aspects of the ETH network have raised questions about security and decentralization.
