Excitement around the merge has already faded, but the long-term benefits Ethereum will reap from the technical upgrade have yet to be realized, according to JPMorgan. After leading the crypto market in the late summer ahead of the event, and enjoying a pre-merge rally, ether ended up being a sell-the-news event. It finished September down about 15% and underperformed other cryptocurrencies. The merge refers to a technical transition meant to improve its security in a way that lowered energy consumption by almost 100%. It was a base layer meant to give way to a series of planned upgrades that will ultimately tackle Ethereum's biggest issues, like its processing capacity and high transaction fees, also known as gas fees. "The cryptocurrency market remains in need of a catalyst and while the merge is the first step in a series of upgrades to Ethereum, the market has yet to price in the upside that might come from increased capacity and throughput that we see as the Ethereum roadmap is executed," Kenneth Worthington, an analyst at JPMorgan, said in a recent note. One of the most attractive potential outcomes of the merge for investors, a smaller supply of ether, hasn't quite arrived yet, but JPMorgan says it's still early. While the ether supply has continued to increase since the merge, it has slowed to a di minimis pace, Worthington said. It could begin to fall if transaction activity were to pick up and block fees, which are down substantially since July, were to rebound, he added. Another selling point for investors, higher staking yields, has changed more slowly than many had hoped. It has increased as expected, however, to about 5.05% from 4.2% before the merge. Maximal extractable value could add more than 100 basis points to the yield, Worthington said. In the near term, crypto assets including ether are in a holding pattern as they wait for both a new catalyst to draw investors into the market and, more importantly, for the Federal Reserve to pivot away from its path of aggressive interest rate hikes. That means that the biggest use case for any cryptocurrency is still speculation, but Ethereum will be a key player in changing that down the road, according to JPMorgan. "We believe that the Ethereum Merge could be a big factor in terms of increasing the use cases for blockchain into new areas, including financial services," Worthington said, highlighting decentralized finance and NFTs.