Even after the recent stabilization of geopolitical tensions in the Middle East, the crypto market is showing a clear bias toward “digital gold.” In a fresh report from JPMorgan, analysts emphasize that the gap between Bitcoin and the rest of the market continues to widen, leaving Ethereum at risk of remaining in the leader’s shadow for the foreseeable future.
BTC Dominance: Facts and Figures
Institutional capital is making a definitive choice. According to The Block, interest in the primary cryptocurrency is recovering significantly faster than in altcoins. Key indicators confirm this trend:
- Spot ETFs: Inflows into Bitcoin funds have already offset two-thirds of the recent outflows. Meanwhile, Ethereum ETFs have recovered by only one-third, signaling low confidence among major players regarding Ether’s short-term growth.
- Futures Market: Open Interest (OI) for Bitcoin on the CME exchange is once again testing historical highs. At the same time, demand for Ethereum futures remains consistently low.
The Upgrade Problem: Why Hard Forks Aren’t Saving the Day
The Glamsterdam and Hegota upgrades are scheduled for the Ethereum network this year. However, JPMorgan remains skeptical. Analysts point to a paradoxical effect of the network’s technological evolution over the past three years:
- Reduced Revenue: Successful scaling through L2 solutions (Layer 2 networks) has lowered transaction costs.
- Inflationary Pressure: Lower fees have led to a reduction in the volume of burned coins. As a result, the supply of Ether is increasing, putting additional downward pressure on its market price.
- Lack of Drivers: Previous hard forks failed to trigger the expected surge in user activity on the mainnet.
Three Barriers for the Altcoin Market
JPMorgan experts highlighted the fundamental reasons why the altcoin sector (including Ethereum) has been stagnating since 2023:
- Liquidity Crisis: Insufficient market depth makes assets vulnerable to manipulation and sharp price swings.
- DeFi Stagnation: The decentralized finance sector has stopped showing explosive growth, failing to offer new mainstream use cases.
- Security Concerns: Frequent protocol hacks and smart contract vulnerabilities continue to deter conservative investors.
“Without a sharp spike in real-world application activity or a qualitative breakthrough in DeFi protocols, the situation for altcoins is unlikely to change,” the bank concluded.
Current Market Status
Despite Bitcoin’s price testing the $82,000 mark on May 11, an atmosphere of caution prevails in the market. Investors prefer to hold positions in the proven asset while ignoring riskier alternatives, further confirming JPMorgan’s thesis on a prolonged period of BTC dominance.
