JPMorgan says ether and altcoins won't catch up to bitcoin without a major network boom

May 19, 2026, 1:59 p.m. 2 min readEther, altcoins likely to keep lagging bitcoin without real utility growth, JPMorgan says. (Unsplash)SummaryJPMorgan said ether has underperformed bitcoin in both price action and institutional flows since the October 2025 deleveraging event. Upcoming Ethereum upgrades may improve scalability, but past upgrades failed to materially boost onchain activity. Altcoins other than ether continue to suffer from weak liquidity, shallow market depth and fading confidence after years of hacks and stalled DeFi growth, the bank said.Ether (ETH) and the broader altcoin market are unlikely to reverse a multi-year trend of underperformance against bitcoin BTC$66,207.78 without meaningful improvements in network activity, decentralized finance (DeFi) adoption and real-world use cases, JPMorgan said in a report last week.Cryptocurrency markets have struggled for much of the past six months as rising interest rates, persistent inflation concerns and weak risk appetite weighed on digital assets. Bitcoin and ether both saw sharp drawdowns earlier this year alongside heavy exchange-traded funds (ETFs) outflows and broader deleveraging across the sector."Both ether and other altcoins have been underperforming bitcoin despite the crypto market recovery since the Iran conflict," wrote analysts led by Nikolaos Panigirtzoglou.The analysts pointed to ETF flows as evidence of the divergence, noting that spot bitcoin ETFs have recovered roughly two-thirds of prior outflows, while spot ether ETFs have recovered only about one-third.Momentum traders, including commodity trading advisors (CTAs) and crypto quant funds, also remain slightly underweight both bitcoin and ether, the report said, suggesting speculative investors have yet to rebuild sizable long positions.Still, crypto prices have stabilized somewhat since the outbreak of the Iran conflict, with investors drawn to the market’s round-the-clock liquidity and signs of renewed institutional demand. Bitcoin and ether have at times outperformed equities and other risk assets during the conflict, even as volatility remains elevated.Upcoming Ethereum upgrades, including Glamsterdam and Hegota in 2026, are designed to improve scalability and lower transaction costs. But the bank's analysts cautioned that previous upgrades failed to drive stronger onchain activity. Instead, earlier upgrades reduced Layer 2 costs and network fees, weakening Ethereum’s token burn mechanism and increasing net supply, which undermined price support.Other altcoins have also underperformed bitcoin since 2023 because of tighter liquidity conditions, weaker market depth and breadth, limited DeFi growth and repeated hacks and security breaches that have eroded investor confidence, the report added.Repeated hacks and security breaches continue to weigh on crypto markets by undermining investor confidence, draining liquidity and slowing institutional adoption. High-profile exploits in DeFi and across trading platforms have triggered capital outflows and raised concerns about the reliability of blockchain infrastructure, particularly for altcoins and decentralized applications.Read more: Bitcoin faces outsized quantum threat as computing breakthroughs accelerate, Citi saysAI Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards. For more information, see CoinDesk's full AI Policy.Related Assets12345678910TRON Network - Q2 2026TRON Network - Q2 2026In Q2; TRON's stablecoin dominance rose to 28.7%, USDT supply on TRON hit $89B ATH, $89M in protocol fees (2nd to Hyperliquid), TRX +3%, and deepening institutional & agentic reach.7 hours agoIn Q2; TRON's stablecoin dominance rose to 28.7%, USDT supply on TRON hit $89B ATH, $89M in protocol fees (2nd to Hyperliquid), TRX +3%, and deepening institutional & agentic reach.Why it matters:In Q2; TRON's stablecoin dominance rose to 28.7%, USDT supply on TRON hit $89B ATH, $89M in protocol fees (2nd to Hyperliquid), TRX +3%, and deepening institutional & agentic reach.View Full Report