Author: Brian McGleenon, The Block; Translation: Wuzhu, Golden Finance
Summary
JPMorgan analysts point out that key catalysts that could impact the cryptos market in the coming months include the seasonal 'Uptober' trend, Fed rate cuts, and Ethereum's 'Pectra' upgrade.
However, they added that despite the potential provided by historical trends and structural developments, the market remains sensitive to macroeconomic factors and is waiting for clearer catalysts for sustained growth.
JPMorgan analysts identified several key factors that could impact the cryptos market in the coming months, pointing out that technical, geopolitical, and structural events could drive price movements. In a research report released on Monday, analysts discussed the impact of the seasonal 'Uptober' trend, Fed rate cuts, approval of Bitcoin exchange-traded fund (ETF) options, and the upcoming Pectra upgrade for Ethereum.
October tends to be a bullish month for cryptos.
One of the key conclusions of the report is the strong historical trend in October, commonly referred to as 'Uptober'. Analysts emphasized that over 70% of Octobers have brought positive returns for Bitcoin.
"While past performance is not indicative of future results, we believe the popularity of 'Uptober' could influence behavior and lead Bitcoin to perform well in October," the analyst wrote.
The Fed's rate-cutting cycle has not yet affected the market cap of cryptocurrencies
Despite the recent rate cuts by the Fed, JPMorgan analysts pointed out that the broader cryptocurrency market has not seen the expected positive impact. They stated that although the environment of falling interest rates generally supports risk assets, the correlation between the total market cap of cryptocurrencies and the federal fund rate remains weak, at 0.46.
"Since the rate cut by the Fed on September 18, we have not seen cryptocurrency prices 'rise' due to the rate cut," they wrote, adding that the market may be waiting for more sustained stability before making a decisive shift.
In addition, analysts acknowledge that the lack of historical data makes it complex to make precise predictions about how cryptocurrencies will respond to interest rate cycles. "Cryptographic assets only appeared in the early to mid-2010s, with interest rates near zero for most of their existence. Stable rates, not just low rates, may bring the most benefit to these markets," they said.
Bitcoin ETF options may enhance market liquidity
Another potential catalyst is the recently approved spot Bitcoin ETF options trading. Analysts expect this to enhance liquidity and attract new participants into the market. They note: "With options, investors can now participate in ETFs in a more dynamic way and drive liquidity in the underlying assets." They added that this development could initiate a positive feedback loop, strengthen market structure, and make it easier for institutional investors to access digital assets.
In mid-September, the U.S. Securities and Exchange Commission (SEC) approved BlackRock's iShares Bitcoin Trust spot ETF to be listed on Nasdaq and trade options. However, the final approval still depends on the Options Clearing Corporation (OCC) and commodity.Futures Trading Commission (CFTC)'s latest data shows that investors are significantly reducing their net short positions in US soybean, corn, and wheat contracts, easing bearish sentiment in the market.The Commodity Futures Trading Commission (CFTC).
The upcoming Ethereum upgrade, known as "Pectra", may have a long-term impact on Ethereum.
The upcoming Ethereum upgrade, Pectra, is emphasized as a significant development. Pectra combines updates from Prague and Electra, implementing over 30 Ethereum Improvement Proposals (EIPs) to enhance network efficiency, validator operations, and account abstraction scaling.
"While Pectra is expected to change the functionality of Ethereum, we believe that this upgrade is more structural rather than a direct price catalyst," analysts said. They believe that the long-term impact of Pectra is to improve Ethereum's operational efficiency and adoption rates, but is less likely to trigger a short-term spike in Ethereum prices.
Overall, analysts at JPMorgan concluded that the cryptocurrency market is in a stagnant state, awaiting clearer macroeconomic or structural catalysts to drive sustained growth. "We continue to see the sensitivity of the crypto ecosystem to macro factors increasing, so we await the next major development catalyst and enhanced retail participation for long-term ecosystem growth," they said.
