Headline: JPMorgan says Ethereum upgrades may not be enough to lift Ether as institutions favor Bitcoin
Ethereum’s native token is struggling to keep pace with Bitcoin during the latest crypto rebound, and a fresh JPMorgan report suggests upcoming network upgrades may not be enough to change that dynamic.
Why Ether is lagging
- Institutional demand has tilted decisively toward Bitcoin, the bank’s team led by Nikolaos Panigirtzoglou finds. After market turbulence tied to the Iran conflict, Bitcoin has rebounded far more quickly than Ethereum.
- Spot Bitcoin ETFs have recovered nearly two-thirds of the outflows seen during the selloff, JPMorgan says. Spot Ether ETFs, by contrast, have only reclaimed roughly one-third of their prior withdrawals—signaling weaker investor appetite for ETH.
- CME futures positioning echoes the same pattern: institutions have almost fully rebuilt Bitcoin exposure, while Ether positioning remains well below earlier levels.
Momentum players still cautious
- Momentum-driven investors—commodity trading advisors and crypto quant funds—also appear slightly underweight on both Bitcoin and Ether after the deleveraging event last October, limiting further upside pressure on prices.
Why upgrades might not be enough
- Attention is focused on Ethereum’s upcoming base-layer upgrades, Glamsterdam and Hegota, which aim to boost throughput and lower transaction costs. JPMorgan questions whether lower fees alone can generate the sustained demand growth Ethereum needs to close the gap with Bitcoin.
- The bank notes a historical paradox: major Ethereum upgrades over the last three years have reduced transaction costs (especially on Layer 2), but haven’t translated into stronger mainnet usage. Lower fees also mean fewer tokens are being burned under EIP-1559’s mechanism, accelerating net supply growth and eroding a source of long-term price support for Ether.
Macro headwinds for altcoins
- JPMorgan also paints a broader picture of weakness across the altcoin market since 2023: thinner liquidity, slowing DeFi activity, and repeated security breaches have made investors more cautious. Hacks and operational failures have deterred fresh capital from flowing into smaller tokens, leaving Bitcoin as the preferred institutional-safe crypto asset.
Bottom line
JPMorgan’s read: Ethereum’s protocol improvements could help user experience and costs, but they may not be sufficient on their own to revive network activity or restore investor confidence. Until burn dynamics, usage metrics, and broader market liquidity improve, institutions appear likely to keep leaning toward Bitcoin.
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