ETH Lags Behind BTC in Recovery, JPMorgan Warns

JPMorgan analysts warn that Ethereum (ETH) and the broader altcoin market may continue to lag behind Bitcoin (BTC) in the crypto market's recovery. This underperformance trend began in 2023 and is likely to persist unless Ethereum and other networks show significant progress in decentralized finance (DeFi) activity and real-world applications.

The analysts cited data showing that spot Bitcoin exchange-traded fund (ETF) flows have recovered roughly two-thirds of previous outflows since the market decline, while spot ETH ETFs have recaptured only about one-third over the same period. CME futures data also showed a similar divergence, with institutional Bitcoin exposure nearly fully restored while ETH futures remain below prior levels.

Momentum-driven traders, including commodity trading advisors and crypto quant funds, remain 'slightly underweight' both assets, linked to a broad deleveraging event in October 2025 that has not fully reversed. The analysts questioned whether Ethereum's upcoming upgrades will be enough to boost network activity, noting that three years of prior upgrades had not meaningfully grown network activity.

The analysts pointed to thinner liquidity, lower market depth, limited DeFi expansion, and repeated security incidents as factors weighing on investor confidence in the broader altcoin ecosystem. They said it remains unclear whether the new upgrades can generate enough demand to offset the continued reduction in Ethereum's burn rate.