In a May 14 client note, JPMorgan analysts warned that Ethereum and other altcoins are unlikely to outperform Bitcoin in the near term, pointing to persistent weaknesses in network activity and institutional demand. The bank’s view reinforces a trend that began in 2023 and has continued through the latest market recovery following the selloff tied to the Iran conflict.
JPMorgan highlighted that Bitcoin continues to attract stronger ETF inflows and is seeing more coins moved into long-term storage. Meanwhile, Ethereum suffers from weak DeFi growth, limited real-world adoption, and rising selling pressure despite upcoming upgrades like Glamsterdam and Hegota. The bank noted that recent upgrades cut Layer 2 costs but also lowered Ethereum’s network fees, weakening the burn mechanism and adding to net supply growth.
Data from spot ETFs and CME futures further illustrate the divergence. Bitcoin ETFs regained about two-thirds of earlier outflows, while Ether ETFs only recovered roughly one-third. Bitcoin futures positioning has nearly returned to pre-drawdown levels, whereas Ether futures remain below those levels. Bitcoin’s dominance near 60% strengthens its position as crypto’s leading store of value, according to the analysts.
Altcoins broadly have underperformed since 2023, weighed down by thinner liquidity, weaker market depth, and repeated security incidents. Ethereum, in particular, needs stronger DeFi usage, more real-world application demand, and deeper on-chain growth to challenge Bitcoin’s lead. Until such developments materialize, JPMorgan expects Bitcoin to keep attracting the bulk of capital during market rebounds.
