Author: Brian McGleenon, The Block; Translated by: Wuzhu, Golden Finance
summary
JPMorgan analysts pointed out that key catalysts that could impact the cryptocurrency market in the coming months include the seasonal "Uptober" trend, the Federal Reserve's interest rate cuts, and Ethereum's "Pectra" upgrade.
However, they added that while historical trends and structural developments offer potential, the market remains sensitive to macroeconomic factors and is awaiting clearer catalysts for sustained growth.
JPMorgan analysts have identified several key factors that could impact the cryptocurrency market in the coming months, noting that technical, geopolitical and structural events could drive price action. In a research note published Monday, the analysts discussed the impact of seasonal “Uptober” trends, the Federal Reserve’s rate cuts, the approval of options on a Bitcoin exchange-traded fund (ETF), and Ethereum’s upcoming Pectra upgrade.
October tends to be a bullish month for cryptocurrencies
One of the main conclusions of the report is the historical trend of strong October performance, often referred to as “Uptober.” The analyst highlighted that more than 70% of Octobers have brought positive returns for Bitcoin.
“While prior performance is not predictive of future performance, we believe the popularity of ‘Uptober’ could have influenced behavior and caused Bitcoin to perform well in October,” the analysts wrote.
The Fed’s rate-cutting cycle has yet to impact cryptocurrency market capitalization
Despite the Federal Reserve’s recent rate cuts, JPMorgan analysts noted that the broader cryptocurrency market has yet to see the expected positive impact. They said that while a falling interest rate environment is generally supportive of risk assets, the correlation between the total cryptocurrency market capitalization and the federal funds rate remains weak at 0.46.
“Since the Fed’s September 18 rate cut, we have yet to see a ‘boost’ in cryptocurrency prices in response to the rate cut,” they wrote, adding that the market may be waiting for more sustained stability before turning decisively.
Additionally, the analysts acknowledged that a lack of historical data complicates making firm predictions about how cryptocurrencies will respond to interest rate cycles. “Crypto assets have really only been around since the early to mid-2010s, and interest rates have been near zero for most of their existence. Stable interest rates, not just low rates, would likely provide the greatest benefit to these markets,” they said.
Bitcoin ETF options could enhance market liquidity
Another potential catalyst is the recent approval of options trading on the spot Bitcoin ETF. Analysts expect this could enhance liquidity and attract new participants to the market. They noted: “With options, investors can now participate in ETFs in a more dynamic way and drive liquidity in the underlying asset.” They added that this development could start a positive feedback loop, strengthening market structure and making digital assets more accessible to institutional investors.
In mid-September, the U.S. Securities and Exchange Commission (SEC) approved BlackRock’s iShares Bitcoin Trust spot ETF to be listed and trade options on the Nasdaq. However, final approval still depends on the Options Clearing Corporation (OCC) and the Commodity Futures Trading Commission (CFTC).
Pectra upgrade could have long-term impact on Ethereum
The upcoming Ethereum upgrade, known as “Pectra,” was also highlighted as a major development. Combining updates from Prague and Electra, Pectra will implement more than 30 Ethereum Improvement Proposals (EIPs) to improve network efficiency, validator operations, and expand account abstraction.
“While Pectra is expected to change the functionality of Ethereum, we view this upgrade as more of a structural one than an immediate price catalyst,” the analysts said. They believe Pectra’s long-term impact will be to increase Ethereum’s operational efficiency and adoption, but is unlikely to trigger a short-term surge in Ethereum prices.
Overall, JPMorgan analysts concluded that the cryptocurrency market is in a stagnation phase, awaiting clearer macroeconomic or structural catalysts to drive sustained growth. “We continue to see a gradual increase in the crypto ecosystem’s sensitivity to macro factors, so we await the next major development catalyst and enhanced retail participation to provide long-term growth for the ecosystem,” they said.
