A research team led by JPMorgan managing director Nikolaos Panigirtzoglou has documented a widening gap in ETF recovery between the two largest cryptocurrencies. Spot Bitcoin ETFs have recaptured approximately 66% of their prior capital outflows, whereas spot Ether ETFs have recovered only about 33%.
BTC vs. ETH ETF Recovery Divergence Widens
The report notes that global markets have been under pressure from inflation fears and diminished risk appetite throughout 2024, yet Bitcoin staged a notably quicker rebound. Institutional investors show a stronger preference for Bitcoin, the analysts said. A comparative table in the report puts Bitcoin's ETF capital recovery at roughly 66% against Ether's 33%.
Institutional De-Risking and Network Upgrade Doubts
JPMorgan's analysis also reveals that major investment entities, including crypto index funds and commodity trading advisors, have reduced their positions in both Bitcoin and Ether. Ethereum's future performance hinges on significant scalability upgrades — named Glamsterdam and Hegota — scheduled for next year. However, analysts remain cautious, noting that previous network upgrades have struggled to drive substantial on-chain usage growth.
DeFi Security Flaws Deter Institutional Capital
A separate JPMorgan report highlights recurring security breaches in decentralized finance (DeFi) as a key barrier. The analysts emphasized that "repeated security breaches have significantly constrained the allocation of capital from major institutions representing traditional finance in the DeFi ecosystem." Traditional financial institutions stay wary, as a single breach can quickly trigger broader liquidity swings.
Corporate Bitcoin Buying: MicroStrategy on Track for $30B
JPMorgan also underscored the scale of recent corporate Bitcoin purchases. MicroStrategy, now rebranded as Strategy, continues its aggressive BTC accumulation. According to JPMorgan estimates, if the company maintains its current pace, it could reach $30 billion in Bitcoin purchases by 2026. The Nasdaq-listed enterprise software firm is a bellwether for corporate Bitcoin holdings, and its buying policy frequently sets a market tone.