Ethereum News
Ethereum (ETH) and the broader #altcoin market have continued to trail Bitcoin (BTC) through the crypto market’s recovery following a period of geopolitical tensions, and JPMorgan analysts say the gap is unlikely to close without concrete gains in network usage.
The findings come from a research note authored by analysts led by Managing Director Nikolaos Panigirtzoglou. The team said the underperformance trend that began in 2023 will persist unless Ethereum and other networks show measurable progress in decentralized finance (DeFi) activity and real-world applications.
ETF Flows and Futures Positioning Diverge
Spot Bitcoin exchange-traded fund (ETF) flows have recovered roughly two-thirds of previous outflows since the market decline. Spot ETH ETFs have recaptured only about one-third over the same period. CME futures data 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. The analysts linked that positioning to a broad deleveraging event in October 2025 that has not fully reversed.
Upgrades May Not Be Enough
The report addressed Ethereum’s upcoming Glamsterdam and Hegota upgrades, which are designed to increase base-layer throughput and lower transaction costs. The analysts noted that three years of prior upgrades had not meaningfully grown network activity. Those earlier changes primarily reduced layer-2 fees, which compressed revenue generated on the base layer, weakened the token burn mechanism, and contributed to net ETH supply growth.
The analysts said it remains unclear whether the new upgrades can generate enough demand to offset the continued reduction in Ethereum’s burn rate. The key question is whether throughput improvements translate into higher usage or simply lower costs with no corresponding rise in activity. “It remains to be seen whether these coming improvements can succeed in boosting network activity or at least drive enough demand growth to offset the continued reduction in Ethereum’s burn mechanism and resulting net supply increase,” the analysts said.
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. “All these factors have eroded confidence in the broader altcoin ecosystem and discouraged the deployment of fresh capital,” the analysts said.
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