Ethereum Outperforms Bitcoin as JPMorgan Highlights ETF Inflows, Regulatory Clarity, and Treasury Adoption

By Marco Piccolo

Ethereum has been outperforming Bitcoin in recent weeks, with JPMorgan analysts attributing the trend to a mix of institutional inflows, regulatory developments, and emerging use cases within traditional finance. In a recent report led by managing director Nikolaos Panigirtzoglou, the bank outlined several factors driving Ethereum’s momentum.

Record ETF inflows and growing investor interest

Ethereum exchange-traded funds (ETFs) attracted a record $5.4 billion in inflows in July, matching Bitcoin ETFs for the month. Notably, while Bitcoin ETFs have since seen modest outflows in August, Ethereum ETFs have continued to draw investment. Analysts suggest that Ethereum may still have considerable room to grow in ETF and corporate adoption compared to Bitcoin.

🔥 BULLISH: Out of 31 days, the $ETH ETFs only saw one day of net outflows.

$5.43B in net inflows for July. pic.twitter.com/jLY2SliByd

— Cointelegraph (@Cointelegraph) August 2, 2025

Key drivers behind Ethereum’s surge

JPMorgan identified four main reasons for Ethereum’s recent strength:

1. Staking opportunities for ETFs: The U.S. Securities and Exchange Commission (SEC) is expected to approve staking for spot Ethereum ETFs, allowing asset managers to generate staking yields without requiring the standard 32 ETH minimum.

2. Corporate treasury adoption: Approximately 10 public companies now hold ETH on their balance sheets, accounting for 2.3% of the current circulating supply. Some of these firms are expected to run validators or engage in liquid staking and DeFi strategies.

3. Regulatory clarity: Staff-level guidance from the SEC has suggested that liquid staking tokens may not be treated as securities, helping to alleviate institutional uncertainty. However, these clarifications have not yet been codified into law.

4. In-kind redemptions: The SEC’s recent approval of in-kind redemptions for both Bitcoin and Ethereum ETFs will allow institutions to redeem shares directly in crypto. This improves cost efficiency, reduces market disruptions during redemptions, and enhances liquidity.

Stablecoin expansion and Ethereum’s network dominance

Ethereum is also benefiting from a surge in stablecoin activity following the U.S. passage of the GENIUS Act in July. JPMorgan analysts pointed out that Ethereum hosts over 50% of the $270 billion stablecoin market, with $138 billion issued on its network. They noted that Ethereum is emerging as a direct proxy for exposure to the expanding stablecoin sector, which could reach a market cap of $500 billion by 2028.

Ethereum now hosts over 52% of the entire stablecoin economy.

That’s more than $TRX, $SOL, $BNB, $HYPE combined.

This doesn’t even count $ETH L2s. pic.twitter.com/BQOUFaMFwm

— SamAlτcoin.eth 🇺🇸 (@SamAltcoin_eth) August 22, 2025

The analysts emphasized that this trend is part of a broader shift, where stablecoins are growing faster than the overall crypto market, indicating a divergence driven by maturing use cases and institutional interest.

Increased on-chain activity also supports ETH’s price due to Ethereum’s fee burn mechanism, which reduces the circulating supply over time. Despite a recent dip in the network’s burn rate due to efficiency improvements from Layer-2 scaling solutions, Ethereum continues to attract capital and utility through new TradFi-DeFi partnerships and infrastructure developments.

JPMorgan concludes that Ethereum’s positioning within both the decentralized and traditional finance ecosystems offers more room for growth compared to Bitcoin, especially as regulatory clarity improves and institutional adoption accelerates.

Source:: Ethereum Outperforms Bitcoin as JPMorgan Highlights ETF Inflows, Regulatory Clarity, and Treasury Adoption