According to JPMorgan’s latest analysis, Ethereum and the broader altcoin market urgently need tangible improvements in on-chain volume, decentralized finance adoption, and real-world use cases in order to break a multi-year trend of losing ground to Bitcoin.
Bitcoin pulls further ahead of altcoins
Over the past six months, the cryptocurrency market has faced significant pressure from rising interest rates and inflation. At the beginning of the year, both Bitcoin and Ethereum recorded sharp price declines amid notable capital outflows from exchange-traded funds, amplifying a general trend of risk reduction across the sector.
Analysts observe that after heightened geopolitical tensions in Iran, markets saw a partial rebound led by Bitcoin. Even during this recovery, however, Ethereum and other altcoins continued to underperform relative to Bitcoin. JPMorgan experts point specifically to ETF inflows as a clear manifestation of this divergence.
Spot ETF flows emphasize the gap
JPMorgan analysts report that assets invested in spot Bitcoin ETFs have now recovered nearly two thirds of previous outflows. In contrast, spot Ethereum ETFs have reclaimed just about a third, highlighting much weaker demand. Moreover, neither short-term traders nor algorithmic funds have shown significant new accumulation in either Bitcoin or Ethereum.
JPMorgan analysts state, “Ethereum and other altcoins have delivered weaker returns compared to Bitcoin, even amid geopolitical tensions in Iran. The divergence in ETF demand has been particularly striking.”
Updates and outlook for the Ethereum network
Experts note that while markets have stabilized to some degree, institutional investor interest and round-the-clock crypto liquidity create ongoing price volatility. Cryptocurrencies have at times outperformed other risk assets such as equities, but overall, Bitcoin remains the dominant performer.
Within the Ethereum ecosystem, upcoming upgrades like Glamsterdam and Hegota—scheduled for 2026—aim to improve scalability and lower transaction costs. JPMorgan cautions, however, that previous upgrades with similar goals failed to deliver the expected boost in on-chain activity.
These past updates reduced costs for second-layer networks but weakened Ethereum’s token burning mechanism. The result has been an increased supply of ETH in circulation and diminished price support.
Altcoins still face trust issues
Since 2023, the main causes behind poor altcoin performance have included shrinking liquidity, reduced market depth, stagnant DeFi growth, and a continued barrage of cyberattacks. Analysts suggest such factors have undermined investor confidence, spurred capital flight, and dampened institutional interest.
Recently, high-profile security breaches across DeFi platforms and crypto exchanges have led to significant financial losses. These events have shaken trust in blockchain infrastructure and heightened concerns specifically for altcoins and decentralized applications.
