Uptober, falling rates, ETFs: Factors that could propel the crypto market by the end of the year

JPMorgan analysts have just released a report detailing key dynamics likely to influence the market in the coming weeks. While the month of October, nicknamed “Uptober”, has historically been a period of positive performance for Bitcoin, experts remain cautious in the face of uncertainties linked to monetary policies and technological innovations. Between the expected drop in interest rates by the US Federal Reserve, the potential arrival of options on Bitcoin ETFs, and the upcoming update of the Ethereum network, the catalysts are numerous and could play a determining role in the evolution prices. 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 surveillance

In their latest report, JPMorgan analysts 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 seen positive returns for Bitcoin, an observation supported by data going back several years. “Although past performance does not guarantee future performance, the popularization of Uptober could influence behavior and lead to a positive month for Bitcoin again this year,” they said. writing in their report. This trend, reinforced by investor psychology, could therefore support an upward dynamic for the market, particularly in a context where institutional demand for cryptos continues to grow.

At the same time, the effect of the reduction in interest rates by the American Federal Reserve is still awaited. While this drop was supposed to support risky assets like cryptos, the market has yet to show any signs of enthusiasm. JPMorgan analysts note that the correlation between falling rates and crypto market capitalization remains low at 0.46. They explain that cryptos' weak history with rate cycles makes any firm prediction difficult, and point out that “cryptos only emerged in the early 2010s, when rates were near zero for most of their history.” existence “.

A market waiting for a new catalyst

Another factor that could shake up the market is the approval of options on Bitcoin ETFs. 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 boost the liquidity of the underlying asset,” the analysts noted. This new dynamic could trigger a positive feedback loop, which strengthens market structure and makes cryptos more accessible to large investors.

Finally, attention also turns to Ethereum and its next update, called “Pectra”. This combination of Prague and Electra updates plans to introduce more than 30 network improvement proposals, with a view to increasing its efficiency and facilitating validator operations. However, JPMorgan analysts remain cautious about the short-term impact of this development, because they believe that while it will improve the functioning of the network in the long term, it is not likely to cause an immediate surge in the price of the Ether. “We view this update as a structural transformation, rather than a short-term price catalyst,” they specify.

In short, the coming months promise to be decisive for the crypto market, with several catalysts awaiting. If the month of October traditionally promises good performances, investors remain expectant in the face of Fed decisions and technological advances such as Bitcoin ETFs or Ethereum updates. However, the accumulation of these factors could well push the market towards a new phase of growth by the end of the year.