JPMorgan Says Ether and Altcoins Can’t Survive Without a Network Boom

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JPMorgan ether warning says network boom is the only fix

Analysts at JPMorgan believe that ether and other altcoins need a significant increase in network usage to reach the same level as Bitcoin.

Summary

  • JPMorgan said ether and altcoins will keep lagging bitcoin without meaningful improvement in DeFi and real-world use cases.
  • Bitcoin spot ETFs have recovered two-thirds of recent outflows, while ether ETFs have recovered only one-third.
  • The bank cautioned that upcoming Ethereum upgrades Glamsterdam and Hegota may not lift network demand on their own.

According to JPMorgan, ether and other cryptocurrencies besides Bitcoin probably won’t start performing better unless there’s a significant increase in how much those networks are used, how many people adopt decentralized finance (DeFi), and how often they’re used in everyday situations.

According to analysts at the bank, led by Nikolaos Panigirtzoglou, bitcoin is still the preferred digital asset for institutions when compared to ether. This assessment comes as bitcoin is trading around $76,760 and ether around $2,260.

Bitcoin ETFs lead the recovery

According to JPMorgan, Bitcoin exchange-traded funds (ETFs) have regained about two-thirds of the money lost during recent sales triggered by the conflict in Iran. Ether ETFs, however, have only recovered around one-third of those outflows. Trading activity suggests Bitcoin futures are now back to levels seen before the recent market downturn, but Ether futures haven’t yet shown the same recovery.

As a crypto investor, I’m keeping a close eye on things, and honestly, the recent struggles we’ve seen since 2023 probably won’t improve unless we get a real boost in how much people are *using* these networks. We need to see more activity in decentralized finance (DeFi) and, importantly, more real-world uses for crypto to turn things around.

Why Ethereum upgrades may not be enough

The next Ethereum upgrades, called Glamsterdam and Hegota, aim to make the network faster and cheaper to use. However, JPMorgan warns that past upgrades haven’t actually increased activity *on* the Ethereum network itself. Instead, they’ve mainly lowered costs for transactions happening on separate ‘Layer 2’ networks and on the main Ethereum chain, which has reduced the amount of ETH being burned and led to a slight increase in the overall supply of ETH.

We reported last week that the bank cautioned Ethereum upgrades might not be enough to balance the network. Experts explained that simply improving the technology won’t solve the issue if fewer coins are destroyed, unless demand increases to compensate for the extra supply.

Altcoin liquidity and hacks weigh on confidence

According to JPMorgan, altcoins (cryptocurrencies other than Bitcoin) have struggled to keep up with Bitcoin’s performance since 2023. This is due to factors like less available trading volume, shallower markets, slower development in decentralized finance (DeFi), and ongoing issues with hacking and security.

These issues have shaken people’s trust in altcoins and made investors hesitant to put new money into the market, according to analysts.

Following the market adjustments in October, investors focused on short-term trends – including those trading commodities and cryptocurrencies – have remained cautious with their investments. Previously, the bank predicted that increased investment from institutions in 2026 would largely benefit Bitcoin, especially if regulations become clearer.

CLARITY Act flagged as a potential catalyst

JPMorgan believes that clearer rules are the biggest factor that could change the current situation regarding digital assets. On May 14th, the CLARITY Act – a bill that would specify which digital assets are regulated by the SEC and which by the CFTC – passed the Senate Banking Committee with support from both Democrats and Republicans, by a vote of 15 to 9.

Now that the measure has passed, the bank anticipates increased investment and activity in the crypto space, including venture funding, mergers and acquisitions, initial public offerings, and wider acceptance by established financial companies.

The report suggests that investors will likely continue to favor bitcoin, seeing it as the most straightforward and potentially profitable large-scale investment within the cryptocurrency market.

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2026-05-20 01:53