Key Points:
• JPMorgan says Ether and the broader altcoin market continue to underperform Bitcoin due to weak network activity and limited real-world adoption.
• The bank noted that spot Bitcoin ETFs have recovered far more institutional inflows than Ether ETFs since the October 2025 market deleveraging event.
• Analysts warned that future Ethereum upgrades may improve scalability but are unlikely to drive sustained price gains without stronger onchain demand and DeFi growth.
JPMorgan Sees Continued Bitcoin Dominance
JPMorgan analysts say Ethereum and the broader altcoin market are unlikely to meaningfully catch up to Bitcoin unless blockchain networks experience a major increase in activity, adoption and real-world utility.
In a report released last week, analysts led by Nikolaos Panigirtzoglou argued that Bitcoin continues to outperform because it remains the dominant institutional crypto asset while much of the altcoin ecosystem struggles with weaker fundamentals.
The bank said Ether and most alternative cryptocurrencies have underperformed Bitcoin throughout the current recovery phase despite improving sentiment following geopolitical tensions tied to the Iran conflict.
ETF Flows Highlight Institutional Preference for Bitcoin
According to JPMorgan, institutional capital flows continue to heavily favor Bitcoin over Ethereum and other digital assets.
The analysts pointed to spot exchange-traded fund data as one of the clearest signs of the divergence.
Spot Bitcoin ETFs have recovered roughly two-thirds of previous outflows during the recent rebound, while spot Ether ETFs have only regained about one-third of earlier losses.
The report also noted that momentum-driven investors, including commodity trading advisors and crypto quantitative funds, remain slightly underweight both Bitcoin and Ether, suggesting speculative positioning has not fully returned to the market.
Ethereum Upgrades May Not Be Enough
JPMorgan acknowledged that upcoming Ethereum upgrades, including Glamsterdam and Hegota planned for 2026, could improve scalability and reduce transaction costs across the network.
However, the bank cautioned that previous Ethereum upgrades failed to generate lasting increases in onchain activity or decentralized finance growth.
Instead, earlier upgrades significantly reduced Layer-2 transaction costs and lowered Ethereum network fees, which weakened the blockchain’s token burn mechanism and increased Ether’s effective supply growth.
That dynamic reduced one of the major deflationary narratives previously supporting ETH prices.
Altcoins Continue Facing Structural Weakness
Beyond Ethereum, JPMorgan said the broader altcoin market remains weighed down by several long-term challenges.
The bank cited weak liquidity conditions, shallow market depth, slower decentralized finance expansion and repeated security breaches across the crypto ecosystem as major obstacles preventing sustained investor confidence.
High-profile hacks involving DeFi protocols and trading platforms have continued damaging sentiment, particularly for smaller blockchain ecosystems attempting to compete with Bitcoin and Ethereum.
According to the analysts, repeated exploits have contributed to capital outflows while also raising concerns about the reliability and maturity of blockchain infrastructure across the altcoin market.
Crypto Markets Stabilize Despite Macro Pressure
The report arrives after a difficult six-month period for digital assets.
Rising interest rates, persistent inflation concerns and weaker appetite for risk assets triggered heavy selloffs earlier this year, alongside large ETF outflows and broad deleveraging across crypto markets.
Despite those pressures, Bitcoin and Ether have recently stabilized and, at times, outperformed equities and other risk-sensitive assets during periods of geopolitical uncertainty.
JPMorgan said investors continue to value crypto markets for their around-the-clock liquidity and growing institutional accessibility, even as volatility remains elevated.
Real Utility Seen as Missing Ingredient
Ultimately, JPMorgan’s report argues that technology upgrades alone are unlikely to reverse the long-running performance gap between Bitcoin and the rest of the crypto market.
Without stronger decentralized finance activity, broader real-world adoption and meaningful increases in network usage, the bank believes Ether and altcoins may continue trailing Bitcoin for the foreseeable future.
The report reinforces a broader institutional view that Bitcoin increasingly functions as the crypto market’s primary macro asset, while many altcoins still struggle to establish sustainable utility and long-term investor demand.
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