- Ethereum surged nearly 40% last week, driven by a major network upgrade and reduced global trade tensions.
- Analysts report that crypto-native investors, not funds, fueled the rally, while Ethereum spot ETFs experienced $55 million in outflows.
- Volatility models indicate a 20% possibility for Ethereum to reach $4,000 by year-end, although experts remain cautious about broader economic risks.
Ethereum experienced a strong price rally last week, climbing from about $1,800 to $2,500. The surge followed a successful network upgrade and signs of progress in global trade discussions. This rebound was observed as investor risk appetite returned to digital assets.
During the week of gains, Ethereum spot exchange-traded funds (ETFs) recorded net outflows totaling $55 million, while Bitcoin spot ETFs saw net inflows of $600 million, according to data cited by Decrypt. Analysts reported that the recent price increase was primarily led by crypto-native investors, not institutions.
“The scale and strength of the price recovery, combined with modest outflows from Ethereum ETFs, suggest that crypto-native investors, rather than institutional inflows, have primarily driven the surge,” said Matteo Greco, a research analyst at Fineqia International, speaking to Decrypt. Donald Trump’s announcement of constructive talks with China and a trade agreement with the U.K. contributed to improved investor sentiment, according to the article. U.S. equity indices marked their largest one-day gains in months, but major cryptocurrencies, including Bitcoin, Ethereum, and Solana, later declined as traders took profits.
The recent Pectra upgrade on Ethereum, launched May 7, made the network more efficient. Upgrades included raising staking limits and improving wallet usability, both of which are designed to support future growth and encourage institutional adoption. “The ETH Pectra upgrade went live without issues, increasing confidence in Ethereum’s ability to scale and paving the way for further institutional adoption,” stated Sean Dawson, Head of Research at Derive.xyz.
Derive.xyz’s volatility models now estimate a 20% chance of Ethereum exceeding $4,000 by Christmas, as reported in Decrypt. Previously, the probability was just 9%. These models also indicate that Ethereum may remain more reactive to market changes than Bitcoin in the coming months.
Despite the positive outlook, some experts advise caution. “Without sustained institutional momentum and further clarity on regulation, we may see consolidation before any new all-time highs are tested,” commented James Toledano, Chief Operating Officer at Unity Wallet.
Last week’s developments have brought fresh attention to Ethereum and the broader crypto market. The future pace of gains, however, may rely on both the fundamentals and ongoing institutional interest.
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