According to reports from ChainCatcher, JPMorgan analysts led by managing director Nikolaos Panigirtzoglou have identified a persistent trend where Bitcoin continues to outperform Ether and altcoins across nearly every institutional metric, even as the broader crypto market rebounds from the Iran conflict selloff. The analysts noted that this underperformance trend that started in 2023 is unlikely to change unless we see meaningful improvements in network activity, DeFi and real world applications. The findings come from a research note authored by analysts led by Managing Director Nikolaos Panigirtzoglou, with the team emphasizing that the gap is unlikely to close without concrete gains in network usage. As per ChainCatcher, Bitcoin trades around $79,500 — still well below its highs but significantly recovered from the lows triggered by U.S.-Iran escalation, while Ether hovers near $2,260. The report points out that based on spot ETF capital flows and institutional futures positions, Bitcoin's recovery is stronger than Ethereum's, with institutional investors rebuilding their exposure to Bitcoin more aggressively than to ether.
As reported by ChainCatcher, spot bitcoin ETFs have recovered roughly two-thirds of their previous outflows, while spot ether ETFs have recovered only about one-third since the market selloff tied to the Iran conflict. The analysts also pointed to CME futures positioning as evidence that institutional investors have rebuilt bitcoin exposure more aggressively than ether exposure, with bitcoin futures positioning recovering almost fully from its earlier drawdown, while ether futures positioning remains below previous levels. CME futures data showed a similar divergence, with institutional Bitcoin exposure nearly fully restored while ETH futures remain below prior levels, demonstrating the clear institutional preference for bitcoin over ether. ChainCatcher reports that JPMorgan believes that without stronger on-chain fundamentals and actual application support, the relative weakness of ETH and altcoins compared to Bitcoin may persist.
According to ChainCatcher, momentum-focused traders such as commodity trading advisors and crypto quant funds still appear to be 'slightly underweight' both bitcoin and ether following last October's deleveraging event. The analysts noted that these institutional investors have not yet returned to their previous positions in either cryptocurrency, indicating continued caution in the market. The report addressed that positioning is linked to a broad deleveraging event in October 2025 that has not fully reversed, with momentum-driven traders maintaining their cautious stance on both major cryptocurrencies. ChainCatcher emphasizes that without stronger on-chain fundamentals and actual application support, the relative weakness of ETH and altcoins compared to Bitcoin may persist.
As reported by ChainCatcher, the analysts questioned whether upcoming Ethereum upgrades expected this year would be sufficient to improve ether's relative performance against bitcoin. The analysts noted that Ethereum upgrades over the past three years failed to meaningfully boost network activity, instead mainly reducing Layer 2 transaction costs, which lowered fees generated on the Ethereum network and weakened the token burn mechanism. The upcoming Glamsterdam and Hegota upgrades are expected to improve Ethereum's scalability by increasing network throughput and lowering transaction costs on the base layer, but the analysts emphasized that it remains unclear whether these new upgrades can generate enough demand to offset the continued reduction in Ethereum's burn rate. The key question is whether throughput improvements translate into higher usage or simply lower costs with no corresponding rise in activity, as the analysts noted that it remains to be seen whether these coming improvements can succeed in boosting network activity or at least drive enough demand growth to offset the continued reduction in Ethereum's burn mechanism and resulting net supply increase.
According to ChainCatcher, the analysts attributed altcoin underperformance to weaker liquidity conditions, lower market depth and breadth, limited growth in decentralized finance activity, as well as repeated hacks and security breaches across the crypto industry. These factors have eroded confidence in the broader altcoin ecosystem and discouraged the deployment of fresh capital, creating a challenging environment for alternative cryptocurrencies to compete with bitcoin's market dominance. The analysts pointed to thinner liquidity, lower market depth, limited DeFi expansion, and repeated security incidents as factors that have weighed on investor confidence, with all these factors having eroded confidence in the broader altcoin ecosystem and discouraged the deployment of fresh capital across the altcoin market.
