JPMorgan: Ethereum Struggles Amid Rising Competition From Rival Blockchains
Ethereum’s native token, ether (ETH), has lagged behind bitcoin (BTC) and other altcoins in recent months as the blockchain faces mounting competition, according to a research report by JPMorgan released on Wednesday.
The bank noted that ETH lacks a strong narrative compared to BTC, which has solidified its status as a store of value and “digital gold.” Meanwhile, activity on the Ethereum network has increasingly shifted to layer-2 solutions, raising concerns about the blockchain’s long-term growth. While Ethereum’s upcoming Pectra upgrade is expected to roll out in April, JPMorgan analysts remain cautious.
“Competitive pressures have driven some decentralized applications (dApps) to migrate from Ethereum to other blockchain networks that offer better efficiency,” wrote analysts led by Nikolaos Panigirtzoglou. Key platforms like Uniswap, dYdX, and Hyperliquid have already moved or are planning to transition to application-specific chains.
The bank highlighted Uniswap’s upcoming migration to Unichain as a particularly significant loss, as it is one of Ethereum’s highest gas-consuming protocols. A shift away from Ethereum’s mainnet could diminish transaction fee revenue and validator rewards, further weakening network economics.
Ethereum’s primary competitors, such as Solana, have gained ground, benefiting from increased activity—particularly from the memecoin sector. JPMorgan warned that this trend could make ETH inflationary, as lower transaction volume results in fewer tokens being burned through Ethereum’s fee mechanism.
Despite these challenges, Ethereum remains dominant in stablecoins, decentralized finance (DeFi), and tokenization markets. Institutional interest in blockchain-based tokenization could provide a boost, but JPMorgan cautioned that competitive pressure from rival networks will likely persist in the foreseeable future.
