Why Ethereum is Outperforming Bitcoin in 2025, According to JPMorgan

Ethereum has taken the spotlight in 2025, with its market performance outpacing Bitcoin over the past three months. JPMorgan analysts have attributed this rally to a mix of institutional adoption, ETF inflows, and regulatory clarity.

The data shows ETH surging nearly 80% in the last 90 days, while BTC has remained relatively flat. This divergence is shaping the narrative that Ethereum may be entering a stronger growth phase compared to Bitcoin.

Read Also: Understanding the Ethereum Blockchain

Key Takeaways

• Ethereum ETFs attracted $5.4 billion in inflows in July, rivaling Bitcoin ETFs.
• Corporate treasuries are increasingly holding ETH, accounting for 2.3% of its supply.
• SEC clarifications eased concerns around liquid staking tokens.
• In-kind ETF redemptions improved liquidity and reduced costs.
• JPMorgan analysts see Ethereum adoption still lagging Bitcoin, leaving more room for growth.

Ethereum ETF Inflows Strengthen Position

One of the biggest drivers behind Ethereum’s outperformance is the surge in ETF flows. Spot Ethereum ETFs recorded $5.4 billion in inflows in July, matching Bitcoin’s totals for the first time.

While Bitcoin ETFs have seen minor outflows in August, Ethereum ETFs continue to attract institutional capital. This trend points to growing investor confidence in ETH’s future role in the digital asset market.

Corporate Treasuries Turning to Ethereum

Another factor fueling Ethereum’s growth is its adoption by public companies. Roughly 10 firms now hold ETH on their balance sheets, accounting for around 2.3% of the total supply.

Some corporates are running validators to earn passive staking rewards, while others are leveraging liquid staking protocols to pursue DeFi yields. This shows Ethereum is gaining recognition beyond retail investors.

Read Also: Ethereum Price Prediction: Can ETH Rebound

Regulatory Clarity Boosts Institutional Confidence

Regulatory clarity has also played a significant role. The SEC has provided staff-level guidance that liquid staking tokens may not be treated as securities. While not yet codified into law, this development eased institutional fears.

This clarification has encouraged more participation from corporate and institutional players, who were previously cautious about exposure to staking derivatives.

In-Kind ETF Redemptions Improve Efficiency

The SEC’s approval of in-kind redemptions for Bitcoin and Ethereum ETFs has further boosted ETH. Institutions can now redeem ETF shares directly in crypto instead of converting to cash.

This reduces liquidation risks during large withdrawals and improves efficiency. For Ethereum, this feature enhances its attractiveness as a long-term institutional asset.

Final Thoughts

Ethereum’s outperformance over Bitcoin in 2025 is being driven by multiple factors, including ETF inflows, corporate adoption, regulatory clarity, and improved ETF mechanics.

JPMorgan analysts believe Ethereum still has significant room for growth, as institutional adoption of ETH lags behind Bitcoin. If these trends continue, Ethereum could solidify its position as the dominant smart contract platform and a leading institutional asset.

Read Also: DBS Bank Launches Ethereum-Based Tokenized Notes

FAQs

Why is Ethereum outperforming Bitcoin in 2025?

Ethereum is benefiting from strong ETF inflows, corporate treasury adoption, and regulatory clarity on staking.

How much has Ethereum gained compared to Bitcoin?

Over the last 90 days, Ethereum has surged nearly 80%, while Bitcoin has stayed relatively flat.

What role do ETFs play in Ethereum’s growth?

Spot Ethereum ETFs attracted record inflows, providing institutional access and fueling price momentum.

Is Ethereum adoption higher than Bitcoin?

Not yet. Bitcoin still leads in institutional adoption, but Ethereum’s gap is narrowing as more corporates add ETH.

What does JPMorgan predict for Ethereum’s future?

JPMorgan sees Ethereum having more upside potential due to its lower institutional penetration and expanding use cases.