JPMorgan unsure of Ethereum's growth despite latest upgrade

JPMorgan unsure of Ethereum's growth despite latest upgrade

Anand Sinha

Thu, January 22, 2026 at 5:44 PM EST

2 min read

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The Ethereum blockchain network just got a fresh jolt of activity, but JPMorgan Chase (NYSE: JPM) isn’t convinced it’s the start of a lasting revival.

Launched by 2015, Ethereum is one of the most widely used blockchain networks because it allows developers to deploy decentralized applications (dApps) onto it.

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In a note to clients this week, the world's largest bank pointed to the network's Fusaka upgrade, completed in December 2025, which increased Ethereum’s data capacity and immediately pushed transaction fees lower.

The result: a short-term spike in transactions and active addresses.

The Fusaka upgrade, following the Pectra and Cancun-Deneb (Dencun) upgrades, has lifted network metrics over the past year.

But JPMorgan analysts led by Nikolaos Panigirtzoglou wrote in the note that history suggests that bounce may fade.

“Historically, Ethereum’s successive upgrades have failed to meaningfully enhance network activity on a sustained basis,” analysts wrote.

Why the boost may not stick

Fusaka increased the number of so-called “blobs” per block, allowing more data to be posted on-chain.

The upgrade eased congestion, lowered fees, and improved throughput—especially for layer-2 networks that depend on Ethereum for data availability.

But those same layer-2s are becoming part of the problem.

JPMorgan highlighted the ongoing migration of activity to networks like Base, Arbitrum, and Optimism, noting that Base now generates the majority of layer-2 revenue. At the same time, competition from faster and more economical blockchains such as Solana continues to intensify.

Add to that the fading of past speculative drivers, such as non-fungible tokens (NFTs), memecoins, and initial coin offerings (ICOs), and Ethereum’s growth engines look weaker than before, the bank said.

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Structural headwinds remain

JPMorgan analysts also flagged capital fragmentation across application-specific chains. Moves by platforms like Uniswap and dYdX to operate on their own chains have siphoned liquidity and revenue away from Ethereum’s main network.

The consequences:

Lower fee burning
Rising ether supply
Declining total value locked (TVL) in ETH

Although the Fusaka upgrade delivered a short-term boost, JPMorgan sees persistent structural pressures that make a durable turnaround for Ethereum unlikely.

Story Continues

The blockchain network's next upgrade, Glamsterdam, is expected to take place later this year.

This story was originally published by TheStreet on Jan 22, 2026, where it first appeared in the Innovation section. Add TheStreet as a Preferred Source by clicking here.

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