Ethereum Upgrade May Lead to Stagnant Growth and Diminished Demand, According to JPMorgan
Ethereum Observes Record Institutional Inflows Amid Stagnant On-Chain Activity
Institutional investors are increasingly leaning toward Ethereum [ETH] following the platform's recent Pectra upgrade, which offers improved staking efficiency and quicker fund movement. However, the upgrade has yet to spark a significant increase in on-chain activity.
Although the upgrade enhances Ethereum's infrastructure, setting it apart from competitors, JPMorgan analysts remain skeptical as prior upgrades have not significantly boosted network activity. This development exposes a growing discrepancy between Ethereum's technological progress and actual user engagement on the blockchain.
Ethereum's focus on institutional adoption is underscored by its integration of token standards like ERC-3643 and ERC-1400, which cater to tokenized securities. Compliance features such as KYC and AML protocols ensure the Ethereum network aligns with traditional finance's regulatory demands, thereby appealing to regulated institutions.
This strategic alignment allows Ethereum to secure backing from significant financial infrastructure players, including the Depository Trust and Clearing Corporation (DTCC). According to JPMorgan analysts, this trend mirrors Bitcoin's, where institutional and corporate engagement has heightened its appeal.
In contrast, Ethereum's institutional appeal appears in CME Futures activity, evidenced by a rise in long positions from institutional players. However, this contrasts with minimal inflows into spot Ethereum ETFs, particularly when compared to the surge in Bitcoin ETFs following Trump's election victory.
While Ethereum's on-chain metrics, such as daily transaction counts and active addresses, remain relatively stagnant, total value locked (TVL) in ETH has increased, signaling more lending and borrowing activity. Though the growth in dollar terms has been subdued, recent developments suggest a potential turning point for Ethereum.
ethereum recently notched its highest weekly inflow of 2025 at $205 million, indicating a shift in sentiment. Despite concerns regarding Ethereum's inflationary pressures and competition from rival chains, the Pectra upgrade and rising institutional demand could help Ethereum reclaim its market position.
As JPMorgan analysts remain cautious, citing falling fees, increased Layer 2 activity, and a rising circulating supply, Ethereum's ability to attract capital despite a 2.93% price dip underscores its resilience. Whether this momentum can persist remains uncertain, but the tide may be turning in ETH's favor.
B2B Stablecoin Payments Surge 30x in 2 Years: Driving Forces Behind this Explosive Growth?
In the realm of B2B transactions, stablecoin payments have seen a staggering 30x surge over the past two years. This explosive growth can be attributed to several factors.
Regulatory shifts have opened the door for major U.S. banks to stake crypto, providing new avenues for institutional participation. As a result, demand and liquidity for stablecoins may increase.
Institutional investors are increasingly allocating portions of their portfolios to cryptocurrencies, viewing top cryptos like Ethereum and Bitcoin as foundational assets for the new internet.
Strategic partnerships between financial institutions like BlackRock and Apollo Global Management and Ethereum have further bolstered stablecoins' relevance within traditional finance.
Optimism surrounding a crypto-friendly regulatory environment and potential approvals of staking-enabled ETFs have also fueled interest in stablecoins. Some speculate about the emergence of an Altcoin Strategic Reserve to boost sentiment around Ethereum and other altcoins.
- Institutional participants may boost demand and liquidity for stablecoins, as major U.S. banks can now stake crypto, thanks to regulatory shifts.
- Institutional investors view top cryptocurrencies, such as Ethereum and Bitcoin, as foundational assets for the new internet, with an increased allocation in their portfolios.
- Strategic partnerships between financial giants like BlackRock and Apollo Global Management and Ethereum have further solidified stablecoins' relevance within traditional finance.
- Optimism surrounding a crypto-friendly regulatory environment and potential approvals of staking-enabled ETFs have added fuel to the interest in stablecoins, with some speculating about an Altcoin Strategic Reserve to bolster sentiment around Ethereum and other altcoins.
- The 30x surge in B2B stablecoin payments over the past two years can be attributed to these factors, marking a significant jump in the relevance and adoption of stablecoins in the financial sector.
