JPMorgan bearish vs. Tom Lee bullish: The value disagreement behind Ethereum's $62,000 target

A debate over Ethereum’s pricing power and value logic is playing out fully between Wall Street and the traditional crypto market.

In mid-May 2026, a report released by JPMorgan’s analytical team stated that unless there are substantive improvements in Ethereum network activity, decentralized finance, and real-world applications, the trend of Ethereum continuing to lag behind Bitcoin since 2023 will be difficult to reverse. Almost at the same time, Fundstrat co-founder Tom Lee once again reiterated his extremely bullish stance on ETH—targeting a price of $62,000.

The two narratives collide aggressively on the same timeline—one pointing to structural weakness, the other to a historic-level opportunity. According to Gate market data, as of May 18, 2026, ETH was quoted at $2,121.01, down 2.42% over the past 24 hours. This price sits exactly at a key node that both bulls and bears are keenly watching.

The Dispute’s Starting Point: Two Reports, Two Paths

On May 15, 2026, a crypto market analysis report was published by a team led by JPMorgan Managing Director Nikolaos Panigirtzoglou. The report’s core judgment was that although the overall market had stabilized somewhat after the sell-off triggered by Iran’s geopolitical conflict, the rebound in Ethereum and other altcoins was clearly weaker than Bitcoin. The report proposed that Ethereum must demonstrate substantive improvements in on-chain activity, DeFi, and real-world application scenarios, otherwise the weak relative posture versus Bitcoin would continue.

Tom Lee’s response was equally direct. In public, he again reiterated his extreme bullish target for ETH to reach $62,000. This price level was not set arbitrarily; its core logic is that Ethereum’s market cap needs to reach about 0.25 of Bitcoin’s—a structural premium level that is historically significant. At the same time, he also provided two stepped reference scenarios: $12,000 (based on the ETH/BTC ratio reverting to the eight-year historical average) and $22,000 (based on reverting to the ratio of the 2021 bull market peak).

The background to this debate is not unfounded. In the first quarter of 2026, the total crypto market capitalization fell by about 20.4%, with Ethereum down more than 30%. After the Iran conflict, institutional capital showed clear selective reflow—Bitcoin absorbed the majority of the funds, while Ethereum’s recovery was noticeably slower. Market attention and capital are being redistributed, and whether ETH can hold onto its “pricing position as the second-largest crypto asset” is at the heart of this dispute.

Capital Splits: What Do ETF and Futures Data Reveal?

JPMorgan’s report cited a set of contrasting data that is highly referential: after the sell-off, Bitcoin spot ETFs had already recovered about two-thirds of net outflows, while Ethereum spot ETFs had only recovered about one-third of the lost funds. By mid-May, cumulative net inflows for Bitcoin spot ETFs had exceeded $58.6 billion, while cumulative net inflows for Ethereum spot ETFs were about $11.83 billion. More recent data shows that for the week of May 11 to 15, Ethereum spot ETFs recorded net outflows of $255 million, and BlackRock’s ETHA alone recorded net outflows of $185 million—clear evidence of selling pressure.

CME futures positioning also shows divergence: institutional investors are rebuilding Bitcoin risk exposure more aggressively than Ethereum. Bitcoin holdings are approaching pre-drop levels, while Ethereum open interest as of May 15 was about $3.606 billion, still hovering at a relatively low tier.

However, Ethereum has also seen positive capital signals. According to Gate Research data, in the week of May 4 to 10, Ethereum recorded net inflows of over $2.6 billion, with whale accumulation and short covering once serving as key forces driving a price recovery. But the sustainability of this brief influx looked unsteady in the face of the large outflows in the following week.

At least, the differences in ETF capital recovery rates reveal the following structural signals: first, Bitcoin is being reclassified by institutional investors. Once uncertainty fades, capital tends to prioritize assets viewed as “digital gold” rather than smart contract platforms viewed as “tech growth stocks.” Second, weak recovery in Ethereum ETFs may be not just a short-term sentiment issue—if its core value proposition cannot generate sustained and quantifiable income, institutional allocation logic will shift. The gap between two-thirds and one-third is not a small figure.

On-Chain Activity: The Contrast Between Peaks and Reality

On-chain data presents a contradictory picture.

In February 2026, the number of Ethereum daily active addresses once approached 2 million, surpassing levels seen during the 2021 bull market period. In the same period, average daily smart contract calls exceeded 40 million, reaching all-time highs. However, this high level was not maintained. As of May 15, 2026, Ethereum’s on-chain transaction volume had decreased by about 1 million from the earlier peak, the number of daily active addresses was trending downward, and Gas fees continued to stay low. Staking inflows also saw a sharp reduction of more than 80%. Meanwhile, according to DeFiLlama data, Ethereum’s total value locked (TVL) across DeFi protocols was about $45.5 billion; its share of the overall on-chain DeFi market had fallen from 63.5% at the start of 2025 to about 53% in May 2026.

The split between record-high active addresses and declining network revenue points to a key question: can usage itself be equated with value capture? Ethereum’s revenue structure is undergoing profound changes. Layer 2 scaling solutions continuously shift transaction execution away from the mainnet, and the reduction in mainnet Gas fees directly weakens the effect of the EIP-1559 burn mechanism—fewer burns mean faster growth in ETH’s net supply, creating structural pressure on the price. Data shows that Layer 2 network monthly active addresses have fallen from about 58.4 million around mid-2025 to about 30 million in February 2026, a decline of nearly 50%; by contrast, mainnet active addresses increased from about 7 million to 15 million, effectively doubling. This pattern of users returning to the mainnet indicates that Layer 2’s long-term appeal as a scaling tool is fading, but the mainnet’s low-fee environment itself cannot recreate effective deflationary pressure for ETH.

The Inflation Narrative: When the Burn Mechanism Falters and Supply-Side Contradictions Emerge

A key argument in JPMorgan’s report—often overlooked but extremely critical—is focusing on Ethereum’s supply dynamics.

Over the past three years, the main focus of technical upgrades has been reducing transaction costs on Layer 2. This succeeded in expanding the ecosystem, but the cost was a sharp decline in mainnet fees. Under the EIP-1559 mechanism, part of network fees is permanently burned—lower fees mean fewer burns, resulting in a higher growth rate of Ethereum’s net supply. In other words, Ethereum is quietly sliding from a “deflationary asset” toward mild inflation.

Two upgrades coming in 2026—Glamsterdam and Hegota—will further reinforce this trend. Glamsterdam is expected to go live in the third quarter. Its core measures include raising the block Gas limit from 60 million to 200 million (a 233% increase), and introducing performance optimizations such as ePBS (separating proposers and builders) and parallel transaction execution, with the goal of pushing network processing capability toward the 10,000 TPS level. Hegota is expected to be deployed in the second half of the year. It will introduce Verkle Trees technology, which can reduce node storage requirements by about 90%. The analysts’ core doubt is this: although these scaling upgrades may significantly improve performance, will they generate enough new demand and network activity to offset the inflationary pressure caused by a weakened burn mechanism?

The “ultrasound money” narrative has been one of ETH’s most important valuation pillars over the past four years. When burn volume systematically declines due to scaling upgrades, the foundation of this narrative is shaken. But the challenge to the narrative does not mean the narrative’s end. If the parallel transaction processing introduced by Glamsterdam can attract enough new applications and transaction activity back to the mainnet, the absolute scale of fee revenue could still rise—even if the fee per transaction is lower, total volume growth could form a compensating effect. The problem is that this is not certain; it is an assumption.

Tom Lee’s $62,000 Logic: Deductions, Not Prophecies

Tom Lee’s $62,000 target price deserves a careful reconstruction of its logical chain.

The number $62,000 is not an emotionally driven price call, but an extreme assumption based on the ETH/BTC ratio reaching 0.25. If Ethereum becomes the core layer of the global payment infrastructure, its market cap could reach one quarter of Bitcoin’s. As a more pragmatic reference scenario, if the ratio reverts to the eight-year historical average of about 0.0479, the corresponding price would be about $12,000; if it reverts to the 2021 bull market peak ratio of about 0.0873, the corresponding price would be about $22,000. On the technical side, Lee believes that if ETH closes in May above $2,100, it will break out of a consolidation range lasting more than five years, forming a deterministic signal that the “market slump” is coming to an end.

It should be pointed out that Lee’s affiliated company, Bitmine Immersion, is building a large-scale Ethereum enterprise treasury. It currently holds about 5.18 million ETH, accounting for roughly 4.29% of the total circulating supply. Its goal is to increase this ratio to 5% in 2026. This means there is a direct vested interest behind his extreme bullish stance.

From a narrative perspective, each of Lee’s target prices is essentially a conditional proposition. “If” the ratio reverts to the mean, returns to the peak, or reaches the historical extreme level of 0.25, then the corresponding price would be realized in sequence. “If” the May closing price breaks above $2,100, then the bull market signal would be confirmed. These are not predictions; they are conditional deductions. The actual market price is the only true standard for verification. As of May 18, ETH was quoted at about $2,121.01—just touching but not yet firmly holding above the much-anticipated technical line.

Can Technical Upgrades Become a Turning Point?

In 2025, Ethereum completed two major protocol upgrades: Pectra (activated on May 7) introduced EIP-7702, allowing external accounts to temporarily execute smart contract code, supporting batch transaction processing and gas fee payers; Fusaka (activated on December 3) introduced the PeerDAS system, which greatly increases data capacity through sampling verification, and raised the default block Gas limit to 60 million.

JPMorgan’s analysis reveals a harsh historical pattern: over the past three years, Ethereum’s past technical upgrades have not led to qualitative growth in on-chain activity. After Pectra and Fusaka went live, ETH’s network revenue did not show structural improvement, and the ETH/BTC ratio continued to trend downward. But that does not necessarily mean future upgrades are destined to be ineffective. The key difference between Glamsterdam and previous upgrades lies in scale—an upgrade magnitude like a 233% jump in the Gas limit could enable application scenarios that previously could not be realized due to performance bottlenecks. The real issue is whether application developers will deploy these applications on Ethereum, which depends on multiple factors such as costs, user experience, and ecosystem support—not solely on improvements in L1 throughput.

Conclusion

The disagreement between JPMorgan and Tom Lee is, in essence, not a simple bullish-versus-bearish judgment on ETH’s price, but a clash between two investment logics.

The former anchors on actual capital flows, network revenue, and relative performance, using an analytical paradigm close to traditional finance: interpreting what is happening with data rather than predicting future turning points. The latter anchors on ratio reversion, historical cycles, and structural change, using an analytical paradigm close to early crypto believers: betting on a value re-rating after technological breakthroughs, focusing on reimagining narratives rather than current data facts.

For market participants, what matters is not choosing which side is “correct”—because the truth may well lie somewhere between them—but understanding the core contradiction ETH is facing right now: Ethereum has reached new highs in active address count and ecosystem network effects, yet its value capture mechanism is undergoing a structural transition. The upcoming technical upgrades carry the possibility of a breakthrough, but before that happens, the market will not price them in early.

As of May 18, 2026, according to Gate market data, ETH was quoted at $2,121.01, down 2.42% over the past 24 hours, with a decline of 1.55% over the past year. The numbers themselves say it: the market has neither voted for the pessimists’ verdict nor priced the optimists’ prophecy. It is still waiting for on-chain evidence that can truly change the situation.