JPMorgan Says Ether and Altcoins Face Prolonged Bitcoin Underperformance Without Stronger on-Chain Activity
JPMorgan analysts said Thursday that Ethereum (ETH) and other altcoins could continue underperforming Bitcoin (BTC) unless on-chain activity and network usage show a meaningful recovery. The bank’s note, cited by The Block, came as Bitcoin traded near $81,600 while Ethereum lagged the broader market rebound that followed the Iran nuclear de-escalation.
The JPMorgan View
JPMorgan’s analysis argues that the gap between Bitcoin and altcoin performance is not purely a sentiment story.
The bank said on-chain metrics, including transaction volume, active addresses, and fee revenue on competing networks, remain depressed relative to the levels seen during prior altcoin rallies. Without a pickup in those activity indicators, capital rotation from Bitcoin into Ethereum and smaller tokens is unlikely to sustain.
Bitcoin’s dominance, the share of total cryptocurrency market capitalization held by BTC, has risen in 2026 as institutional demand from spot ETF inflows concentrated in the largest asset.
Ethereum’s market cap sat near $195 billion on Thursday, giving BTC a roughly 8:1 advantage by market cap. The spread has widened since the start of the year.
Background
The Ethereum network underwent its Dencun upgrade in March 2024, which sharply reduced fees on Layer-2 networks that settle to Ethereum.
While the upgrade succeeded technically, critics argued it compressed fee revenue for ETH holders and weakened the deflationary mechanism introduced by the 2021 EIP-1559 upgrade. ETH’s price has not returned to its November 2021 all-time high near $4,800.
Bitcoin, by contrast, surpassed its prior record and reached above $109,000 in January 2026 before pulling back.
JPMorgan has maintained a cautious stance on speculative cryptocurrency assets throughout the current cycle, even as the bank’s digital assets division has expanded its blockchain product offerings for institutional clients.
Also Read: Why Regular Cryptocurrency Transactions Are Not Private
What to Watch
Traders focused on the ETH/BTC ratio should watch weekly active address counts on Ethereum mainnet and total value locked across major Layer-2 networks. A sustained rise in either metric would support JPMorgan’s implied threshold for a rotation trade.
The next major Ethereum upgrade, Pectra, is scheduled for later in 2026 and may act as a catalyst. Until then, the bank’s outlook favors Bitcoin as the primary institutional allocation.
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