JPMorgan "Bitcoin Dominance Continues"...Altcoin Recovery, Well?

▲ Bitcoin (BTC), Ethereum (ETH), Altcoins / ChatGPT generated image

A JPMorgan analysis found that Bitcoin (BTC) continues to outperform Ethereum (ETH) and altcoins in terms of institutional capital flows, derivatives positions, and market confidence. As the cryptocurrency market recovers from the sell-off shock caused by the US-Iran conflict earlier this year, Bitcoin's dominance is becoming more pronounced in the institution-centric market.

According to TheStreet on May 14 (local time), JPMorgan analysts led by Managing Director Nikolaos Panigirtzoglou stated in a report that Bitcoin is outperforming Ethereum and altcoins across almost all institutional metrics. JPMorgan diagnosed that the relative underperformance of Ethereum and altcoins, which has continued since 2023, is unlikely to change unless significant improvements are seen in network activity, decentralized finance (DeFi), and real-world use cases.

The most significant difference was observed in spot Exchange Traded Fund (ETF) flows. JPMorgan analyzed that Bitcoin spot ETFs recovered approximately two-thirds of the outflows incurred during the sell-off phase, while Ethereum spot ETFs recovered only about one-third. In Chicago Mercantile Exchange (CME) futures positions, Bitcoin has almost recovered its previous declines, but Ethereum futures positions still remain below past levels.

JPMorgan maintained a positive outlook for the cryptocurrency market in 2026. The bank expects cryptocurrency inflows this year to exceed the $130 billion that entered the digital asset market in 2025. In particular, it believes that these inflows are likely to be driven more by institutional investors than by retail investors. Amidst this outlook, Bitcoin is emerging as the clear winner, with altcoins generally lagging in terms of liquidity recovery, according to the analysis.

JPMorgan also expressed a cautious view on Ethereum upgrades. Ethereum is preparing for mid-year Glamsterdam and late-year Hegota upgrades according to its 2026 roadmap. Glamsterdam aims to expand Layer 1 throughput, while Hegota targets reducing node storage requirements by up to 90% through Verkle Trees. However, JPMorgan pointed out that Ethereum upgrades over the past three years have not significantly increased network activity, mainly focusing on reducing Layer 2 transaction costs. As a result, mainnet fees and the token burning mechanism have been weakened, leading to an increase in net supply and a weakening of Ethereum's price support.

Pressure on the altcoin market also continues. JPMorgan analyzed that low market depth and breadth, coupled with repeated hacking and security incidents, have eroded investor confidence in the altcoin ecosystem and discouraged new capital allocation. However, regulation was presented as a variable that could change the trend. The US cryptocurrency market structure bill passed the Senate Banking Committee on May 14 (local time) with a bipartisan vote of 15 to 9, and JPMorgan believes that the passage of such a bill could facilitate cryptocurrency venture investment, mergers and acquisitions, initial public offerings, and the adoption of digital assets by traditional financial institutions.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*