Wall Street giant JPMorgan Chase recently released a research report analyzing key factors that may affect the trend of the cryptocurrency market in the coming months.

Wall Street giant JPMorgan Chase recently released a research report analyzing key factors that may affect the trend of the cryptocurrency market in the coming months, including: Uptober (October is bullish), the US Federal Reserve (Fed) interest rate cuts, the approval of Bitcoin spot ETF options, and the upcoming Ethereum "Pectra" upgrade.

The probability of an upward trend in October is high

As we enter the fourth quarter, many investors are optimistic that the cryptocurrency market will regain its strength and expect Bitcoin's "Uptober Effect" to take effect again.

The JPMorgan Chase analysis team also mentioned in the report that October has always been a month of rising cryptocurrency markets, and the probability of Bitcoin recording positive returns in October is more than 70%. Analysts said:

Although historical performance does not guarantee that it will be repeated in the future, the "Uptober" theme has been deeply rooted in people's minds and may affect investment behavior, making Bitcoin expected to usher in an optimistic performance in October this year.

Fed rate cuts have yet to have a noticeable impact on the cryptocurrency market

Although the Fed launched a rate-cutting cycle last month, JPMorgan analysts pointed out that the overall cryptocurrency market has yet to show the "expected positive effects."

The analysts added that while falling interest rates generally help boost risk assets, the correlation between the total market value of the cryptocurrency market and the Fed’s benchmark rate is currently only “0.46,” indicating that the impact is limited. They wrote:

Since the Fed announced the interest rate cut on September 18, we have not seen a "surge" in cryptocurrency prices due to the rate cut.

Analysts added that the market may be waiting for the overall economic environment to stabilize further before making any significant moves.

In addition, analysts also pointed out that since cryptocurrencies only began to rise in the mid-2010s, when interest rates were close to zero for most of the time, the lack of sufficient historical data also made it difficult for the team to predict how cryptocurrencies would respond to interest rate cycles, but they still said:

Stable interest rates, not just low ones, would likely provide the biggest benefit to the cryptocurrency market.

Bitcoin ETF options trading helps increase market liquidity

Another potential catalyst is the approval of options trading for the Bitcoin spot ETF. Analysts believe that the introduction of options trading will attract more investors and increase market liquidity.

Through option trading, investors can participate in ETFs in a more flexible way, which is expected to form a positive cycle, enhance market structure, and make digital assets more accessible to institutional investors.

In mid-September this year, the U.S. Securities and Exchange Commission (SEC) allowed Nasdaq to promote the listing and trading of options for BlackRock's Bitcoin spot ETF, but before it is officially listed, it must obtain approval from the U.S. Office of the Comptroller of the Currency (OCC) and the Commodity Futures Trading Commission (CFTC).

The Pectra upgrade is expected to promote the long-term development of Ethereum

The upcoming Ethereum “Pectra” upgrade is also a highlight of the report.

According to reports, this upgrade combines the two updates "Prague" and "Electra", which includes more than 30 Ethereum Improvement Proposals (EIPs) aimed at improving network efficiency, optimizing validator operations, and expanding account abstraction functions.

While Pectra is expected to improve Ethereum’s performance, we believe that this upgrade is a structural improvement with limited impact on prices in the short term.

Analysts believe that in the long run, the Pectra upgrade will enhance the efficiency and popularity of Ethereum, but it is unlikely to immediately trigger a surge in the price of Ethereum.

Overall, JPMorgan analysts noted that the cryptocurrency market is currently in a wait-and-see mode, awaiting clearer macroeconomic or structural catalysts to drive sustained growth.

We believe that the cryptocurrency market is becoming increasingly sensitive to macroeconomic factors, and we expect major catalysts in the future to drive market growth and attract more retail investors to achieve long-term growth.