JPMorgan CEO Warns Ethereum’s Fusaka Boost May Not Last

TLDR

• Fusaka lifts Ethereum usage, but JPMorgan warns gains may be short-lived
• Lower fees, rising L2 migration, and fading speculation pressure Ethereum
• JPMorgan flags structural hurdles that threaten Ethereum’s long-term outlook
• Solana and L2 chains draw activity away, weakening Ethereum mainnet demand
• Short-term boost fades as Ethereum faces deep structural and liquidity risks

Ethereum recorded a sharp rise in network activity after the Fusaka upgrade, yet the JPMorgan CEO signaled concerns about its durability. The bank observed lower fees and higher usage, but it stressed that past trends show brief gains followed by declines. Moreover, the JPMorgan CEO underlined that long-standing structural hurdles still weigh on Ethereum’s outlook.

Ethereum Performance After Fusaka

Ethereum expanded its block data capacity through the Fusaka upgrade, and the change immediately lowered transaction fees across the network. Usage rose as addresses and transactions increased, but the JPMorgan CEO noted that these improvements may not hold. Furthermore, analysts reported that similar boosts faded after previous upgrades, and they argued that familiar constraints persist.

Layer-2 networks continue to pull significant activity from the main chain, and this shift reduces core Ethereum demand. Base has become a major driver of Layer-2 revenue, and the JPMorgan CEO emphasized that this migration limits sustained main-chain growth. Additionally, the wider distribution of onchain activity continues to weaken Ethereum’s fee generation.

Competition from fast and low-cost alternatives has strengthened, and this trend remains a major pressure point. Solana attracted developers and users due to speed and cost, and the JPMorgan CEO highlighted this challenge in the report. Ethereum faces a broader landscape that splits user engagement across several ecosystems.

Market Dynamics and Structural Pressures

Speculative activity has declined across the sector, and that shift removed a major catalyst that previously supported Ethereum usage. NFTs, ICOs, and memecoins once drove heavy volumes, yet their momentum faded or shifted to other chains. The JPMorgan CEO stressed that this reduction weakens one of Ethereum’s historic demand pillars.

Capital inflows now reach application-specific chains, and this migration continues to reshape liquidity patterns. Uniswap moved to Unichain and dYdX shifted to its own chain, and those decisions redirected activity. The JPMorgan CEO noted that such moves reduce main-chain liquidity and diminish protocol revenue tied to Ethereum.

The bank observed a decline in fee burning due to reduced main-chain transactions over the past year. Ethereum’s supply increased as a result, and the JPMorgan CEO said this trend pressures the token’s long-term economics. In addition, analysts highlighted declining total value locked in ETH terms as another concern.

Outlook for Ethereum and Wider Crypto Trends

Ethereum may gain temporary momentum from upgrades, yet the JPMorgan CEO believes sustained recovery requires deeper structural change. The bank noted that Ethereum researchers already question whether two upgrades can be completed in 2026. Moreover, the CEO stated that recurring delays also limit confidence in long-range growth.

The report contrasted this stance with a strong outlook for Bitcoin, and the bank reaffirmed its $170,000 price target. Bitcoin showed improving relative volatility and steady flows, and the JPMorgan CEO noted stronger momentum compared with Ethereum. Meanwhile, the bank expects wider crypto inflows in 2026 led by large institutions.

Ethereum traded near $2,992 after the upgrade effects emerged, yet the JPMorgan CEO repeated that durability remains uncertain. The bank said short-term boosts may continue, but long-standing challenges remain unchanged. Consequently, the report concluded that Fusaka’s gains may fade unless fundamentals shift meaningfully.

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