In brief
- Ethereum jumped nearly 40% last week, fueled by a successful network upgrade and easing global trade tensions.
- Analysts say crypto-native investors—not ETFs—drove the rally, with Ethereum spot funds seeing $55 million in outflows.
- Volatility models give ETH a 20% chance of hitting $4,000 by year-end, though caution remains over macro risks.
Ethereum rallied nearly 40% last week, climbing from around $1,800 to $2,500, as risk appetite returned to digital assets amid easing trade tensions and a major network upgrade.
The rally has drawn renewed interest in Ethereum, though analysts say further gains may depend on stronger fundamentals.
U.S. President Donald Trump’s announcement of constructive talks with China, alongside a limited trade agreement with the U.K., helped drive macro optimism, lifting traditional equities on Monday.
The Dow, S&P 500, and Nasdaq posted their largest one-day gains in months, led by strength in tech and industrial stocks.
Why Is Ethereum Beating Bitcoin With Explosive Gains?
For the past two years, Ethereum's price has lagged behind Bitcoin. But over the past two days, ETH has been outpacing BTC and other major coins, with three analysts whom Decrypt contacted attributing its huge gains to a flawlessly executed technical upgrade and a few hopeful signs about the global economy. The analysts believe that Ethereum may have significant upside after languishing in the doldrums amid concerns about its underlying network's speed and efficiency. "The market is poised to re...
Digital assets, however, failed to sustain recent momentum. Bitcoin, Ethereum, and Solana all declined on the day, with analysts pointing to profit-taking after last week’s sharp rebound.
“There can be no doubt that the recent rebound in Bitcoin, Ethereum, and Solana reflects renewed market optimism,” James Toledano, Chief Operating Officer at Unity Wallet, told Decrypt.
“However, I do believe this could be a hollow rebound, as it is based on sentiment and the political moves of a single man,” he added. “Anyone who is serious about crypto would prefer that fundamentals are the driving force.”
That skepticism is being echoed in ETF flows. While Bitcoin spot ETFs recorded $600 million in net inflows last week, Ethereum ETFs saw $55 million in outflows.
“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,” Matteo Greco, research analyst at Fineqia International, told Decrypt.
Ethereum Rolls Out Pectra, Its ‘Most Ambitious Upgrade Yet’
Ethereum has successfully activated the first phase of Pectra, its latest major upgrade since Dencun in March last year, going live at 6:05am ET in New York on Wednesday. Following the hard fork itself, developers faced a nail-biting wait to see if the network had achieved finality, which took place at 6:18am ET. The Pectra hardfork has finalized on #Ethereum! Congratz everyone 🥳🥳 pic.twitter.com/sOwPVN1UOO — beaconchain.eth 📡 (@beaconcha_in) May 7, 2025 Pectra introduces sweeping changes t...
Ethereum’s Pectra upgrade, which went live on May 7, has been a significant catalyst driving renewed interest in the world’s second-largest crypto, analysts say.
The upgrade, among many other quality of life updates, improved staking limits and wallet usability.
“The ETH Pectra upgrade went live without issues, increasing confidence in Ethereum’s ability to scale and paving the way for further institutional adoption,” Sean Dawson, Head of Research at Derive.xyz, told Decrypt.
Derive’s models now assign a 20% probability that Ethereum will surpass $4,000 by Christmas, up from 9% last week. Volatility metrics also suggest the asset could remain more reactive than Bitcoin in the months ahead.
Still, Toledano noted: “Without sustained institutional momentum and further clarity on regulation, we may see consolidation before any new all-time highs are tested.”
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