JPMorgan ether and altcoin analysts said the tokens won’t catch bitcoin without a major lift in network activity.
Summary
- JPMorgan said ether and altcoins will keep lagging bitcoin without meaningful improvement in DeFi and real-world use cases.
- Bitcoin spot ETFs have recovered two-thirds of recent outflows, while ether ETFs have recovered only one-third.
- The bank cautioned that upcoming Ethereum upgrades Glamsterdam and Hegota may not lift network demand on their own.
JPMorgan said ether and the broader altcoin market are unlikely to reverse a multi-year underperformance against bitcoin without a meaningful pickup in network activity, DeFi adoption and real-world use cases.
The bank’s analysts, led by managing director Nikolaos Panigirtzoglou, argued that bitcoin continues to outperform ether across nearly every institutional metric. The note lands as bitcoin trades near $76,760 with ether near $2,260.
Bitcoin ETFs lead the recovery
Bitcoin spot ETFs have recovered roughly two-thirds of outflows tied to the Iran conflict selloff, while ether spot ETFs have recovered only about one-third, JPMorgan said. CME futures positioning in bitcoin sits close to pre-crash levels, while ether has yet to catch up.
“And this underperformance trend that started in 2023 is unlikely to change unless we see meaningful improvements in network activity, DeFi and real world applications,” Panigirtzoglou wrote.
Why Ethereum upgrades may not be enough
Upcoming Ethereum upgrades Glamsterdam and Hegota are designed to improve scalability and lower transaction costs. JPMorgan cautioned that previous upgrades failed to drive stronger onchain activity and instead reduced Layer 2 costs and main-chain fees, weakening the ETH burn mechanism and increasing net supply.
The bank’s previous warnings on Ethereum upgrades were covered on crypto.news last week, with analysts arguing technical improvements alone cannot offset reduced burning unless demand grows enough to absorb the supply increase.
Altcoin liquidity and hacks weigh on confidence
Beyond ether, JPMorgan said altcoins have underperformed bitcoin since 2023 because of tighter liquidity, weaker market depth and breadth, slower DeFi growth and repeated hacks and security breaches.
“All these factors have eroded confidence in the broader altcoin ecosystem and discouraged the deployment of fresh capital,” the analysts said.
Momentum investors including commodity trading advisers and crypto quant funds have kept conservative positions on both assets after October’s deleveraging event. The bank’s earlier call for institution-led inflows in 2026 leaned on bitcoin as the primary beneficiary of regulatory progress.
CLARITY Act flagged as a potential catalyst
JPMorgan flagged regulatory clarity as the one variable that could shift the dynamic. The CLARITY Act, which defines which digital assets fall under the SEC and which under the CFTC, cleared the Senate Banking Committee on May 14 with a bipartisan 15-9 vote.
The bank has said passage could trigger fresh institutional activity around crypto venture funding, M&A, IPOs and adoption by traditional financial firms.
Until then, the report concludes that institutional capital will keep tilting toward bitcoin as the cleanest macro trade in the asset class.
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