Ethereum’s slide behind Bitcoin is no longer just a price story; JPMorgan says the institutional plumbing now confirms that $BTC has pulled decisively ahead on flows, leaving $ETH and the wider altcoin complex struggling to keep up.
According to a research note summarized by CoinMarketCap Academy and other outlets, JPMorgan analysts led by managing director Nikolaos Panigirtzoglou argue that Ethereum ($ETH) and the broader altcoin market “may continue to underperform Bitcoin ($BTC)” unless there is “meaningful improvement” in network activity, decentralized finance (DeFi) adoption and real‑world applications. The bank traces the current divergence back to the October 2025 deleveraging, when a sharp, geopolitics‑driven selloff triggered heavy liquidations in $ETH products relative to $BTC, particularly among systematic and crypto‑native traders. While markets have since stabilized, the analysts say $ETH has failed to fully regain lost ground either in price terms or in key institutional flow metrics.
JPMorgan highlights spot ETF flows as one of the clearest signs of that gap. The bank estimates that spot Bitcoin ETFs have now recovered roughly two‑thirds of the outflows they suffered during the October 2025 drawdown, while spot ether ETFs have only clawed back about one‑third of their redemptions over the same period. Futures positioning at the Chicago Mercantile Exchange (CME) tells a similar story: institutional Bitcoin exposure on regulated futures has “nearly fully restored” to pre‑selloff levels, but $ETH futures open interest and net long positioning remain well below earlier peaks. Momentum‑driven players such as commodity trading advisors and quant funds are described as “slightly underweight” both assets, but the underweight is more pronounced in $ETH, reflecting the heavier deleveraging it endured last October.
Beyond flows, JPMorgan points to fundamentals. The note argues that, despite a series of Ethereum upgrades over the past three years, the network has not produced “meaningful” growth in on‑chain activity: DeFi volumes have plateaued, total value locked remains below cycle highs, and user counts and transaction fees have not shown the kind of sustained expansion that would justify a sharp re‑rating versus Bitcoin. Lower base‑layer fees have also reduced $ETH token burns under EIP‑1559, contributing to faster net supply growth and weakening one of the core “ultra‑sound money” narratives that once differentiated Ethereum from other smart‑contract platforms.
For altcoins more broadly, the bank cites thinner liquidity, lower order‑book depth and a string of security incidents as factors weighing on sentiment and discouraging fresh institutional capital. “All these factors have eroded confidence in the broader altcoin ecosystem and discouraged the deployment of fresh capital,” the analysts write, adding that Bitcoin has benefited from a perception as the “safer” macro and regulatory bet within the crypto complex. Earlier JPMorgan work this year already framed $BTC as the “clear winner” in terms of ETF resilience and institutional positioning, noting that Bitcoin products have held net inflows even as some gold and silver funds bled assets.
The implication of the latest note is stark: upgrades alone will not rescue $ETH’s relative trade. Unless Ethereum can reignite on‑chain activity—particularly in DeFi, real‑world assets and other non‑speculative use cases—and demonstrate that those flows translate into fee revenue and token demand, JPMorgan expects Bitcoin to keep leading both on price performance and in capturing the next leg of institutional inflows.
