Ethereum has been consistently outperforming Bitcoin in recent months, and a new analysis from JPMorgan provides deep insight into the key reasons behind this shift. The report highlights four critical factors that are giving Ethereum an edge over the world’s first cryptocurrency. Let’s explore these elements in detail.
Inflows Through Ethereum ETFs
JPMorgan notes that Ethereum has been receiving stronger inflows through its spot and futures-based ETFs compared to Bitcoin. In fact, the U.S. SEC’s approval of spot Ethereum ETFs earlier this year unlocked billions in institutional capital.
The report shows that Ethereum ETFs attracted nearly $2.5 billion in net inflows within three months of launch, compared to Bitcoin ETFs that witnessed declining momentum. Institutions are increasingly betting on Ethereum’s versatile ecosystem rather than Bitcoin’s singular store-of-value narrative.
Growth of DeFi and On-Chain Utility
Ethereum continues to dominate decentralized finance (DeFi), accounting for over 58% of the $80+ billion total value locked (TVL) in smart contracts, according to DefiLlama.
This growing utility across lending, staking, tokenization, and decentralized exchanges is creating sustained demand for ETH. JPMorgan stresses that Bitcoin, while dominant as a reserve asset, lacks the programmable utility that DeFi on Ethereum provides. This is a major differentiator in long-term growth potential.
Staking Yields and Supply Reduction Post-Merge
Another critical factor is Ethereum’s proof-of-stake model. With an average staking yield of 3.5%–4% annually, ETH offers holders a passive income stream that Bitcoin cannot provide.
Additionally, Ethereum’s “ultrasound money” narrative is playing out. Following EIP-1559 and The Merge, ETH supply has been deflationary, with over 1.6 million ETH burned since 2022, reducing sell pressure and making ETH increasingly scarce. This has been attractive to both retail and institutional investors.
Corporate and Treasury Adoption
JPMorgan highlights that corporations are beginning to explore Ethereum for tokenization of assets and treasury diversification. Financial giants like BlackRock, DBS Bank, and SBI Holdings have announced projects using Ethereum-based infrastructure.
This enterprise-grade adoption is fueling confidence that Ethereum is more than just a cryptocurrency—it is evolving into a settlement layer for global finance. Bitcoin, while still preferred for reserves, lacks the programmability to compete in this area.
Final Thoughts
JPMorgan’s analysis underscores that Ethereum’s edge lies in its adaptability and multi-dimensional use cases. From institutional ETF flows to staking economics and corporate adoption, Ethereum is cementing its place as the backbone of Web3 and tokenized finance.
While Bitcoin remains the leading digital store of value, Ethereum is carving out a broader financial role—one that may define the next decade of digital assets.
