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Ethereum Upgrades Have Failed to Boost Network Activity in Meaningful Way: JPMorgan
Neither the number of transactions nor active addresses has increased significantly following recent network upgrades, the report said.
Updated May 30, 2025, 3:19 p.m. Published May 30, 2025, 2:28 p.m.
What to know:
- Recent Ethereum upgrades haven't resulted in increased network activity, JPMorgan said.
- The bank noted that average and total fees have fallen since the Dencun upgrade in March 2024.
- Futures positioning suggests that institutions played a large role in the recent rally in ether, the report said.
The Ethereum blockchain has yet to see a significant increase in activity despite successive upgrades, investment bank JPMorgan (JPM) said in a research report.
"Neither the number of daily transactions nor the number of active addresses saw a material increase post recent upgrades," analysts led by Nikolaos Panigirtzoglou wrote in the Wednesday report.
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Still, total value locked (TVL) on Ethereum increased between the Dencun upgrade in March 2024 and Pectra earlier this month, the bank noted, possibly due to increased lending and borrowing on decentralized exchanges (DEXs), but the increase looks lower in dollar terms than in the blockchain's ether token.
Ethereum activated the Pectra upgrade on May 7. The update aims to streamline staking, enhance wallet functionality and improve overall efficiency.
Pectra makes the ETH token and Ethereum itself more appealing to institutions, the bank said. It distinguishes the network from competitors, but the upgrades haven't boosted activity in a meaningful way.
The bank noted that following the Dencun upgrade, both average and total fees fell, in part because of a shift toward layer 2 chains.
Ether's circulating supply also increased after Dencun, which raised concerns about the crypto "becoming an inflationary asset amid subdued transaction activity," JPMorgan said.
Futures positioning suggests that institutions played a large role in the recent rally in ether, the report added. Ether has risen more than 45% in the past month, CoinDesk data show.
Read more: Ether Only Crypto Major in Green, XRP Muted After Mammoth Treasury Plans
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Coinbase Sees Crypto Recovery Ahead as Liquidity Improves and Fed Rate Cut Odds Climb
The crypto exchange also took note of a so-called AI bubble that continues to go strong and a weaker U.S. dollar.
Ano ang dapat malaman:
- Coinbase Institutional is seeing a potential December recovery in crypto, citing improving liquidity and a shift in macroeconomic conditions that could favor risk assets like bitcoin.
- The firm's optimism is driven by rising odds of Federal Reserve rate cuts, with markets pricing in a 93% chance easing next week, and improving liquidity conditions.
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