JPMorgan Says Weak Network Activity Will Keep Ethereum Lagging Bitcoin
JPMorgan said in a research note published May 20 that Ethereum and altcoins are likely to keep trailing Bitcoin without a meaningful recovery in on-chain network activity. The bank said institutional flows have diverged sharply since an October deleveraging event, with capital consistently favoring Bitcoin over ETH and the broader altcoin market.
The analysis frames the underperformance as structural rather than temporary.
JPMorgan Ethereum Network Activity Warning
The note, reported by CoinMarketCap, argues that on-chain usage metrics are the key variable separating Bitcoin’s trajectory from Ethereum’s. Bitcoin has continued to attract institutional capital, while ETH has struggled to demonstrate comparable network demand growth.
JPMorgan’s analysts said altcoins face the same dynamic at a more acute level.
Ethereum (ETH) traded near $2,100 on May 20, having reclaimed that level after a recent pullback. The token remains well below its 2021 all-time high and has lost ground to Bitcoin (BTC) in year-to-date performance.
Bitcoin held near $76,600 in early Asian trading Wednesday.
JPMorgan’s framing points to a fundamental divergence in how the two assets are accumulating users and transaction volume. Bitcoin benefits from ETF-driven institutional demand that does not depend on active network usage in the traditional sense.
Ethereum’s value case rests more directly on developer activity, application revenue, and transaction throughput.
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How We Got Here
Ethereum’s underperformance relative to Bitcoin became a dominant narrative through the first quarter of 2026. The October 2025 deleveraging event JPMorgan references was a broad crypto market unwind that hit ETH harder than BTC, partly because ETH carried more leveraged long positioning.
Since that unwind, institutional capital has rebuilt primarily in Bitcoin, aided by spot ETF products that provide regulated exposure without requiring custody of the underlying token.
The ETH-to-BTC ratio has trended lower through much of this period. Ethereum’s transition to proof-of-stake, the consensus mechanism that replaced energy-intensive mining in September 2022, was expected to tighten token supply and boost price.
Instead, the macro environment and competition from faster Layer-1 blockchains have weighed on ETH’s relative performance.
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What to Watch
The JPMorgan note does not set a timeline for when network activity could recover.
Analysts watching Ethereum will focus on transaction fee revenue, active address counts, and developer deployment rates as the leading indicators JPMorgan appears to have in mind.
A sustained rise in Ethereum Layer-2 activity or a catalyst from a major protocol upgrade could shift the picture. The bank’s positioning implies ETH remains a show-me story for institutional allocators until those metrics improve in a measurable way.
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