Ethereum Underperformance Set to Persist Without Concrete Gains
The crypto market's recovery has seen Bitcoin (BTC) outperforming its altcoin counterparts, including Ethereum (ETH), according to JPMorgan analysts. A research note from Nikolaos Panigirtzoglou and his team found that the underperformance trend in ETH and other networks will persist unless they show significant progress in decentralized finance (DeFi) activity and real-world applications.
The report noted that spot Bitcoin ETF flows have recovered two-thirds of previous outflows since the market decline, while spot ETH ETFs have recaptured only one-third. CME futures data showed a similar divergence, with institutional Bitcoin exposure nearly fully restored while ETH futures remain below prior levels.
The analysts also addressed Ethereum's upcoming Glamsterdam and Hegota upgrades, designed to increase base-layer throughput and lower transaction costs. However, they noted that three years of prior upgrades had not meaningfully grown network activity and raised questions about whether the new upgrades can generate enough demand to offset the continued reduction in Ethereum's burn rate.
For altcoins broadly, the analysts pointed to thinner liquidity, lower market depth, limited DeFi expansion, and repeated security incidents as factors that have weighed on investor confidence. They stated that 'all these factors have eroded confidence in the broader altcoin ecosystem and discouraged the deployment of fresh capital.'