JPMorgan Identifies Four Factors Behind Ethereum’s Outperformance

Ethereum has outperformed Bitcoin, with JPMorgan citing four reasons for its dominance.

Over the past month, Ethereum has outperformed Bitcoin in terms of dynamics (+14% versus -5.4%). Analysts at JPMorgan have identified four key reasons for the asset’s dominance, reports The Block.

Firstly, the market anticipates the US Securities and Exchange Commission (SEC) will approve staking for spot ETFs based on Ethereum. This would allow fund managers to earn income from locking assets for investors without requiring a minimum of 32 ETH.

Secondly, corporate treasuries are rapidly acquiring Ethereum. About 10 public companies hold ETH on their balance sheets, amounting to 2.3% of the current available supply. Experts believe some corporations intend to become validators to earn passive income from regular or liquid staking, as well as through DeFi pools.

Thirdly, the SEC has clarified to staff that liquidity tokens cannot be considered securities. Analysts noted that this has eased institutional investors’ concerns, although the statements have yet to be enshrined in law.

Fourthly, the recent approval by the Commission of in-kind redemption for spot ETFs on BTC and ETH will allow institutions to redeem shares directly for cryptocurrency, rather than converting them to cash.

“This increases efficiency, reduces costs, and enhances market liquidity for exchange-traded funds, while eliminating the need to liquidate assets during large investor withdrawals,” noted JPMorgan.

Experts believe Ethereum has more growth potential compared to Bitcoin in both the ETF sector and corporate treasuries.

Back in August, the Ethereum network recorded the largest queue for staking withdrawals—over 910,000 ETH worth $3.7 billion. Crypto analyst Bull Theory explained the situation as profit-taking.