Ethereum and bitcoin Jordan Mansfield/Getty Images
JPMorgan reported that institutional investors are avoiding bitcoin futures due to changing views about the top cryptocurrency.
Analysts said that bitcoin futures traded below the actual bitcoin price in September.
Since August, big investors have been steadily shifting to ethereum amid a "strong divergence of demand."
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JPMorgan analysts said that big-money investors are shifting to ethereum futures trading as the market's expectations for the largest cryptocurrency in the world slow down.
Analysts noted that bitcoin futures traded on the Chicago Mercantile Exchange in September below the actual bitcoin price.
Analysts wrote that this was a setback for Bitcoin and a reflection on weak demand from institutional investors who tend to use CME futures contracts to gain exposure.
Futures trade at a premium over actual bitcoin when there is healthy demand. According to JPMorgan research, futures prices rise due to high storage costs for bitcoin and the lucrative yields that passive crypto investing offers.
Analysts wrote that this dynamic makes current weakness in futures particularly bearish for Bitcoin.
Since August, institutional investors have been steadily shifting to ethereum. According to CME data, JPMorgan cited, the average 21-day ethereum futures premium rose by 1% over actual prices. This indicates a "strong divergence of demand."
Analysts at JPMorgan wrote that this indicates a much stronger demand for ethereum than bitcoin from institutional investors.
Bitcoin prices fell 10% while Ether has dropped 3% over the past month.
JPMorgan's crypto expert, who co-authored the note about institutional demand, told Insider last week that he expects ethereum will continue to decline as it faces increasing competition from cardano and solana.
