JPMorgan Says Ethereum, Altcoins May Continue to Lag Bitcoin
Summary
- JPMorgan said the relative weakness in Ethereum (ETH) and the altcoin market may continue for the time being.
- The report said BTC has shown stronger resilience than ETH in areas including spot ETFs and institutional futures positions, while altcoins are struggling to regain investor confidence because of weak liquidity and shallow market depth.
- Market participants said the impact of the upcoming ETH upgrade and growth in DeFi and real-world assets (RWA) markets will be key variables for the direction of altcoins.
Forecast Trend Report by Period
JPMorgan says Ethereum and the broader altcoin market may remain relatively weak for now as a Bitcoin-centric market structure strengthens.
The Block reported on May 14 that JPMorgan said in a recent report the trend of altcoins underperforming Bitcoin since 2023 will be difficult to reverse unless decentralized finance, or DeFi, and real-world assets, or RWA, show meaningful improvement.
The bank said Bitcoin has shown greater resilience than Ethereum across several areas, including spot exchange-traded funds and institutional futures positions.
It added that although Ethereum is approaching an upgrade, it has failed to lift network activity over the past three years.
JPMorgan said that has, in particular, weakened the existing token-burning mechanism.
The bank also said the broader altcoin market is struggling to regain investor confidence because of worsening liquidity conditions and shallow market depth.
Institutional money has recently continued to flow mainly into Bitcoin, extending altcoins' relative weakness.
Market participants are closely watching whether Ethereum's upgrade delivers an effect and whether the DeFi and RWA markets expand, with both seen as key variables for the direction of altcoins.
