JPMorgan says bitcoin dominance over ether and altcoins likely to continue in 2025

Bitcoin's dominance — or the percentage of total market capitalization bitcoin holds compared to other cryptocurrencies — is expected to continue into 2025, according to JPMorgan analysts. 

"We expect bitcoin's dominance over Ethereum and other alternative tokens to continue this year for several reasons," JPMorgan analysts led by managing director Nikolaos Panigirtzoglou wrote in a report on Wednesday. Bitcoin's dominance is currently near 55% as the world's largest cryptocurrency trades close to $100,000, according to The Block's Data Dashboard .

The eight factors

JPMorgan analysts identified eight key factors that could drive bitcoin's continued dominance:

First, bitcoin's narrative as the digital component of the " debasement trade ," alongside gold, continues to attract significant inflows into spot bitcoin ETFs from both retail and institutional investors. In contrast, spot ether ETFs have seen subdued interest, with only $2.4 billion in inflows so far, suggesting limited demand for future altcoin ETFs like Solana's, the analysts said.

Second,  MicroStrategy is only halfway through its $42 billion bitcoin acquisition plan, according to the analysts, which provides further momentum for the cryptocurrency.

Third, the analysts said that future  crypto reserve accumulation by U.S. states, governments, or central banks is likely to focus solely on bitcoin, further boosting its position.

Fourth, advances in Bitcoin's Layer 2 networks  enable it to support smart contracts, challenging platforms like Ethereum, according to the analysts.

Fifth, institutional blockchain applications, such as digital bond trading and transaction settlements, have increasingly shifted to private or consortium blockchains. These offer more privacy and customization, reducing the appeal of public blockchains like Ethereum for large institutions, the analysts said.

Sixth, emerging projects are prioritizing infrastructure development over token issuance, marking a shift from the token-centric strategies of the 2021/2022 bull market. For example, Coinbase-incubated Base , an Ethereum Layer 2 network, has gained significant traction and market share without launching a token. "In this model, profits from successful projects often benefit private corporations, diverting value from crypto tokens," the analysts said.

Seventh, many decentralized projects experienced early success but quickly saw declines in user activity and token value as the hype faded. Decentralized social media platforms like Friend.tech, Farcaster and Lens struggled to maintain adoption, highlighting the need for more time to demonstrate lasting utility, according to the analysts.

Lastly, while clearer and more crypto-friendly U.S. regulations could improve sentiment and increase the appeal of other tokens beyond bitcoin, it remains uncertain how much these changes would integrate crypto into traditional finance or boost public blockchains like Ethereum, the analysts noted.

They added that the crypto market remains in a consolidation phase as it awaits regulatory clarity from the new U.S. administration. However, these policies might take time to materialize, as the administration's initial focus will likely to be on tariffs and immigration. The delay in regulatory clarity may prolong the consolidation phase, leaving the market highly sensitive to movements in the tech sector of equity markets, according to the analysts.