JPMorgan: Ethereum and altcoins may continue to underperform Bitcoin unless network activity significantly improves

May 15th News, according to The Block, JPMorgan analysts stated that despite the overall recovery of the crypto market after the Iranian conflict, Ethereum and altcoins continue to underperform Bitcoin. Analysts believe this trend, which began in 2023, is unlikely to change unless there are substantial improvements in network activity, DeFi, and real-world applications. Analysts pointed out that spot Bitcoin ETFs have recovered about two-thirds of their previous outflows, while spot Ethereum ETFs have only recovered about one-third. CME futures positions show that institutions are rebuilding their Bitcoin exposure more strongly than Ethereum, with Bitcoin futures positions almost fully recovered, while Ethereum futures positions remain below previous levels. Analysts also questioned whether the upcoming Ethereum upgrade can effectively boost network activity. They stated that upgrades over the past three years have primarily reduced Layer 2 transaction costs, leading to lower Ethereum network fees, a weakened token burning mechanism, and accelerated net supply growth, thereby undermining ETH's price support. For altcoins, analysts noted that poor liquidity, insufficient market depth, limited DeFi activity growth, and repeated hacking incidents have eroded confidence, hindering new capital allocation.