Whether you are inside or outside the circle, you must have heard about Ethereum's news these days. The reason is simple: Ethereum, which once made E-guards sigh in frustration and defenders nearly washed out, 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 integrates the Prague execution layer hard fork and Electra consensus layer upgrade, significantly enhancing 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 entry barrier and attracting more users and developers. The staking mechanism optimization raises the ETH cap for validators from 32 ETH to 2048 ETH and introduces flexible withdrawal methods, facilitating institutional and individual participation 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 activities. As a key step for Ethereum's transition from "2G" to "5G", the Pectra upgrade not only enhanced network vitality but also directly drove price increases by injecting market confidence.
Not only Ethereum itself, but Wall Street also brought important positive news.
The world's largest asset management company, BlackRock, proposed to the SEC to allow Ethereum ETF staking. This proposal is expected to upgrade 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 filing to allow investors to create and redeem ETF shares directly with Ethereum instead of US dollars (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 executed on the Ethereum network, investing in traditional assets like US Treasury bonds. This is highly attractive to institutional investors, as they can not only share Ethereum's price appreciation 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 Ethereum ETF's attractiveness. He candidly admitted that after the Ethereum spot ETF launch in July 2024, market demand was lukewarm 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 crypto regulation also boosted this rally. The previous SEC chair maintained a tough stance, strictly treating staking as potential unregistered securities based on the Howey Test, thus 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 visibly loosened. Besides BlackRock, ETF issuers like Invesco Galaxy, VanEck, WisdomTree, and 21Shares have also submitted similar applications for staking and in-kind redemption.
If staking ETFs are approved, the benefits would likely extend far beyond price increases. The introduction of staking functionality might redefine the role of crypto assets, making them closer to traditional financial products that 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 "Altcoin season" calls growing louder, Ethereum's strong performance might just be the beginning of a larger crypto market wave.
Additionally, WLFI, a DeFi project 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 revived the entire Altcoin market. However, amid the joy, there are also bearish voices. Here's 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 potentially life-changing surge in the next 3-6 months, with some Altcoins possibly seeing stunning single-day gains of 40%.
@liuwei16602825 states that this rally definitively signals the bull market's return. There's no need to worry about pullbacks. The main force driving the rally uses high-cost isolated trading and fears drops more than any retail investor, so they will inevitably defend the market.
Bears mainly argue that this rally differs from the 2021 bull market, with the current market lacking massive retail 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 coming days, it might suggest they no longer see upside potential for ETH and are preparing to take profits and exit. The focus will be on monitoring the closing times.
@FLS_OTC says that the current macro-level uncertainties and insufficient liquidity cannot support a major bull market. This is a "last gleam before darkness" rather than a complete reversal, and they will maintain a short position.
@off_thetarget believes that after ETH's transition from POW to POS, it lost the "gold standard" support of mining electricity costs, and the staking economic model caused value anchoring to fail. Additionally, the L2 ecosystem's (like Starknet, zkSync) liquidity fragmentation prevents effective fund recycling, causing the split plate model to collapse. Furthermore, the ETH community's excessive focus on technical narratives detached from actual needs has led to weak ecosystem growth. Therefore, he believes ETH's internal value system has collapsed, and its 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 the "High-Probability Trading Strategy", when three trading systems with different underlying logics (such as volume exhaustion, price supply and demand, long and short position funding rates, etc.) simultaneously issue short signals at the same point (2580), a high-probability trading opportunity is formed. He emphasizes that these systems must be based on different algorithms and logics (rather than simply overlaying technical indicators), and the current ETH trend meets multiple independent dimensions of short conditions in his trading system, thus choosing to short.
Overall, Bitcoin still maintains over 54% market dominance, and institutional funds' continued preference may limit Altcoins' upside potential. 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 Ethereum's recent leadership has brought optimistic sentiment, investors still need to remain rational, as different Altcoin sectors are likely to show divergent trends. As for whether this Ethereum rally can truly bring an Altcoin frenzy, it may require more time and conditions.
