The Ethereum blockchain network just received a new lease of life, but JPMorgan Chase (NYSE: JPM ) isn’t convinced it’s the beginning of a lasting renaissance.
Launched in 2015, Ethereum is one of the most widely used blockchain networks as it allows developers to deploy decentralized applications (dApps) on it.
In a note to clients this week, the world’s largest bank noted that the network’s Fusaka upgrade, completed in December 2025, increased Ethereum’s data capacity and immediately reduced transaction fees.
The result: a short-term surge in transactions and active addresses.
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Following the Pectra and Cancun-Deneb (Dencun) upgrades, the Fusaka upgrade has improved network metrics over the past year.
But JPMorgan analysts led by Nikolaos Panigirtzoglou wrote in a note that history suggests the rebound may fade.
“Historically, successive upgrades to Ethereum have failed to consistently and effectively enhance network activity,” analysts wrote.
Fusaka increases the number of so-called “blobs” per block, allowing more data to be published to the chain.
The upgrade eases congestion, lowers fees, and increases throughput, especially for layer 2 networks that rely on Ethereum for data availability.
But that same second layer is becoming part of the problem.
JPMorgan highlighted the migration of activity to networks such as Base, Arbitrum and Optimism, noting that Base now generates the majority of second-tier revenue. Meanwhile, competition from faster, more affordable blockchains like Solana continues to intensify.
Coupled with the decline of past speculative drivers such as non-fungible tokens (NFTs), meme coins and initial coin offerings (ICOs), Ethereum’s growth engine looks weaker than before, the bank said.
JPMorgan analysts also pointed to the dispersion of capital within specific application chains. The move by platforms like Uniswap and dYdX to operate on their own chains has sucked away liquidity and revenue from the Ethereum main network.
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Despite the short-term boost from the Fusaka upgrade, JPMorgan believes that ongoing structural pressures make a lasting upturn in Ethereum unlikely.