Whether you are inside or outside the circle, you must be familiar with Ethereum news these days. The simple reason is that Ethereum, which once made E-guards sigh and nearly washed away its defenders, has topped the TikTok hot list with a "40% surge in 3 days".
Where does the upward momentum come from?
It is well known that Ethereum launched the Pectra upgrade on May 7th. This most significant network upgrade since early 2024 merged the Prague execution layer hard fork and Electra consensus layer upgrade, significantly improving Ethereum's performance through 11 improvement proposals. The account abstraction feature (EIP-7702) allows users to flexibly manage wallets through social media accounts or multi-signature schemes, lowering the usage threshold and attracting more users and developers. The staking mechanism optimization raised the ETH validator cap from 32 ETH to 2048 ETH and introduced flexible withdrawal methods, making it easier for institutions and individuals to participate in network security and enhancing market confidence in Ethereum's long-term value.
Meanwhile, Pectra optimized interaction efficiency with Layer 2 networks like Arbitrum and Optimism, making transactions faster and cheaper, thus triggering a surge in on-chain activity. As a key step for Ethereum to move from "2G" to "5G", the Pectra upgrade not only enhanced network vitality but also "recharged market confidence", directly driving price increases.
Not only Ethereum itself, but Wall Street also brought important good news.
The world's largest asset management company, BlackRock, proposed to the SEC to allow Ethereum ETF staking. This proposal is expected to upgrade the Ethereum ETF from a mere investment tool to a "interest-bearing asset" similar to bonds, bringing investors dual returns of capital appreciation and passive income, and igniting market optimism about Ethereum's future potential.
Specifically, BlackRock proposed modifying its S-1 file to allow investors to create and redeem ETF shares directly with Ethereum instead of US dollars (i.e., in-kind redemption), and combined with its BUIDL fund launched in March 2024 worth $2.9 billion, deepening the integration of traditional finance and blockchain. The BUIDL fund is a tokenized fund running on the Ethereum network, investing in traditional assets like US Treasury bonds. This is extremely attractive to institutional investors, as they can not only share the benefits of Ethereum price increases but also obtain stable cash flow through staking.
BlackRock's digital assets head Robert Mitchnick told CNBC in an interview in March 2025 that adding staking functionality would significantly enhance the attractiveness of the Ethereum ETF. He candidly admitted that after the Ethereum spot ETF was launched in July 2024, market demand was flat due to the lack of staking functionality, and staking might be the key to turning the situation around.
Meanwhile, the SEC's changing attitude towards cryptocurrency regulation also boosted this wave of increases. During the tenure of the previous chairman, the SEC's attitude was tough, strictly treating staking as potential unregistered securities based on the Howey test, and explicitly prohibiting staking functionality when approving the Ethereum spot ETF in May 2024.
However, with Trump's return to the White House and Paul Atkins taking over the SEC, crypto regulation has been noticeably relaxed. Besides BlackRock, ETF issuers like Invesco Galaxy, VanEck, WisdomTree, and 21Shares have also submitted similar applications for staking and in-kind redemption.
However, if staking ETFs are approved, the benefits should far exceed price increases. The introduction of staking functionality may redefine the role of crypto assets, making them closer to traditional financial products that can generate both returns and appreciation, pushing Ethereum closer to mainstream finance.
Currently, the SEC still needs to handle multiple crypto ETF-related decisions, including whether to approve spot ETFs for other cryptocurrencies like Solana, XRP, Litecoin, and even Dogecoin. With the rising calls for an "Altcoin season", Ethereum's strong performance may just be the beginning of a larger crypto market boom.
Additionally, the DeFi project WLFI related to the Trump family is also optimistic about this rally and has been active on-chain. According to on-chain data analyst @ai_9684xtpa's monitoring, WLFI-related addresses are borrowing to long ETH, borrowing 4 million U from Aave to buy 1,590 ETH at an average price of $2,515.
Has Ethereum's price reached its peak?
This epic rally after Ethereum's half-year silence has indeed brought more confidence and hope to the community and driven the entire Altcoin market to recover. However, amid the joy, there are also voices of pessimism. Here is a summary by BlockBeats based on community discussions.
Optimists point out that the current market structure is similar to the eve of bull markets in 2016 and 2020, predicting a life-changing surge in the next 3-6 months, with some Altcoins potentially achieving an astonishing 40% single-day increase.
@liuwei16602825 stated that this rally definitively marks the return of the bull market. There's no need to worry about a pullback. The main force of the increase uses high-cost isolated trading, and they fear a decline more than any retail investor, so they will definitely do their best to support the market.
The bears mainly believe that this rally is different from the 2021 bull market, with the current market lacking massive retail investor entry and long-term holding confidence, and fund rotation happening too quickly.
@market_beggar observed that Bitfinex E/B whales have started closing positions and believes that if these whales maintain high-speed position closing in the next few days, it can be speculated that they no longer see upside potential for ETH and are preparing to take profits and exit, and the focus should be on the timing of position closing.
@FLS_OTC stated that there are still many macro-level uncertainties, and liquidity cannot support a big bull market. The current stage is a "last flash" rather than a complete reversal, so he will maintain an empty position.
@off_thetarget believes that after ETH's transition from POW to POS, it lost the "gold standard" support of mining machine electricity costs, and the staking economic model led to value anchor failure. Meanwhile, the L2 ecosystem (such as Starknet, zkSync, etc.) has liquidity fragmentation and cannot form an effective capital backflow mechanism, causing the split plate model to collapse. Additionally, the ETH community's excessive pursuit of technical narratives detached from actual needs has led to weak ecosystem growth. Therefore, he believes ETH's internal value system has collapsed, and the price will inevitably plummet to the 800-1200 range, and he will short decisively at the 1800 point.
@Airdrop_Guard, based on the core logic of "High Probability Trading Strategies", which is when three trading systems with different underlying logics (such as volume attenuation, price supply and demand, long and short holding rate, etc.) simultaneously send short signals at the same point (2580), forming a high-probability trading opportunity. He emphasizes that these systems must be based on different algorithms and logics (not just technical indicator overlay), and the current ETH trend meets multiple independent dimensional short conditions in his trading system, so he chooses to short.
Overall, Bitcoin still maintains over 54% market dominance, and institutional funds' continued preference for it may limit Altcoins' upside. The market's future direction will depend on multiple factors, such as Bitcoin's price trend, global macroeconomic conditions, and whether funds can effectively rotate from Bitcoin to the Altcoin sector.
Although the recent Ethereum-led rally has brought optimistic sentiment, investors still need to remain rational, as different Altcoin sectors may show divergent trends. As for whether this Ethereum rally can bring a true Altcoin frenzy, it may still require more time and conditions.
