Uptober, Rate Decreases, ETFs: Factors That Could Propel The Crypto Market By The End Of The Year

Analysts at JPMorgan have just released a report detailing the key dynamics likely to influence the market in the coming weeks. While October, nicknamed “Uptober,” has historically been a period of positive performance for Bitcoin, experts remain cautious in the face of uncertainties related to monetary policies and technological innovations. Between the expected decline in interest rates by the US Federal Reserve, the potential arrival of Bitcoin ETF options, and the upcoming Ethereum network update, there are numerous catalysts that could play a decisive role in price evolution. These different elements combined could well initiate a new phase of growth for the entire crypto market by the end of the year.

A Month of October Under Close Watch

In their latest report, analysts at JPMorgan highlighted a seasonal situation that has become central in the crypto universe: the “Uptober” trend. According to them, more than 70% of Octobers have historically recorded positive returns for Bitcoin, an observation supported by data going back several years. “Although past performance does not guarantee future results, the popularization of Uptober could influence behaviors and lead to another positive month for Bitcoin this year,” they wrote in their report. This trend, reinforced by investor psychology, could therefore support a bullish dynamic for the market, especially in a context where institutional demand for cryptos keeps growing.

Meanwhile, the effect of the US Federal Reserve’s interest rate cut is still awaited. Although this cut was supposed to support risky assets like cryptos, the market has yet to show signs of enthusiasm. Analysts at JPMorgan note that the correlation between interest rate cuts and crypto market capitalization remains weak at 0.46. They explain that the limited history of cryptos facing rate cycles complicates any firm predictions, and emphasize that “cryptos only emerged in the early 2010s when rates were close to zero for most of their existence.”

A Market Awaiting a New Catalyst

Another factor likely to shake up the market is the approval of Bitcoin ETF options. According to JPMorgan, the arrival of these options could not only increase market liquidity but also attract a new influx of investors, particularly institutional ones. “With options, investors now have a more dynamic way to engage with ETFs and stimulate the liquidity of the underlying asset,” noted the analysts. This new dynamic could trigger a positive feedback loop, strengthening the market structure and making cryptos more accessible to large investors.

Finally, attention also turns to Ethereum and its upcoming update, called “Pectra.” This combination of the Prague and Electra updates aims to introduce more than 30 proposals for network improvement, to increase its efficiency and facilitate validator operations. However, JPMorgan analysts remain cautious about the short-term impact of this evolution, as they believe that while it will improve network operations in the long term, it is unlikely to cause an immediate surge in the price of Ether. “We view this update as a structural transformation rather than a short-term price catalyst,” they specify.

In short, the coming months are set to be decisive for the crypto market, with several catalysts pending. While October traditionally promises strong performance, investors remain in suspense regarding the Fed’s decisions and technological advances like Bitcoin ETFs or Ethereum updates. However, the accumulation of these factors could well push the market toward a new growth phase by the end of the year.