JPMorgan says Ethereum will keep lagging Bitcoin without flow rebound

Ethereum’s price and institutional inflows have stayed well behind Bitcoin since the October 2025 deleveraging, JPMorgan warns, unless network activity picks up dramatically. The bank’s research note points to spot ETF flows—about two‑thirds of Bitcoin’s outflows recovered versus only one‑third for Ether—and CME futures positioning that shows Bitcoin exposure nearly back to pre‑sell‑off levels while ETH futures remain far below earlier peaks [1].

JPMorgan attributes the widening gap to three intertwined factors. First, Ethereum’s on‑chain activity has stalled: DeFi volumes have plateaued, total value locked stays under cycle highs, and transaction fees have not risen enough to offset the supply‑growth effect of lower base‑layer burns after EIP‑1559 upgrades [1]. Second, regulatory uncertainty around staking limits institutional appetite, leaving large investors without a clear yield wrapper for ETH holdings [3]. Third, the broader altcoin market suffers from thinner liquidity, shallower order‑book depth and recent security incidents, which together erode confidence and keep fresh capital locked in Bitcoin, perceived as the safer macro bet [1].

The data on institutional products reinforce the narrative. Spot Bitcoin ETFs have clawed back roughly 66 % of the capital they lost during the October sell‑off, while spot Ether ETFs have reclaimed only about 33 % [2]. CME futures data show Bitcoin’s institutional exposure “nearly fully restored,” whereas ETH futures open interest and net‑long positions remain well below historic levels [1]. Momentum‑driven players such as commodity trading advisors and quant funds are underweight both assets, but the underweight is more pronounced for ETH, reflecting the heavier deleveraging it endured last October [1].

If Ethereum cannot translate its protocol upgrades into measurable growth in DeFi adoption, real‑world use cases, and fee revenue, JPMorgan expects Bitcoin to continue capturing the bulk of institutional inflows and to outpace ETH on price performance. The open question is whether upcoming upgrades—such as the planned Glamsterdam and Hegota enhancements—will generate enough on‑chain demand to narrow the flow gap, or if Bitcoin will cement its role as the default institutional crypto benchmark.