What's Driving Ethereum's Surge—And Can It Last?

In brief

Experts generally agree that favorable regulatory shifts in the United States and massive buy-ups of Ethereum on Wall Street have enabled ETH’s current, ongoing streak.
Some analysts contend these factors are so bullish for Ethereum, that the token will continue to surge through the end of the year, potentially beyond $7,000.
Others caution, however, that the token is also dependent on macro conditions and could remain below $5,000 if the economy sours.

Ethereum has been on an upward tear for weeks now, and looks primed to break its four-year-old record high.

Market experts who spoke with Decrypt agreed that a handful of variables, ranging from regulatory overhauls in the United States to deflationary trends in ETH acquisition, are likely responsible for the cryptocurrency’s recent climb.

But while some are convinced the pivotal factors contributing to Ethereum’s rise are unique to the cryptocurrency, and could lead to a doubling of its price again by year’s end, others worry macro factors could send ETH dumping nearly as quickly as they lifted the token in the first place.

In the last month, ETH and other crypto tokens have received sizable bumps from regulatory developments in the United States, where the White House, the SEC, and Congress have all rolled out aggressively pro-crypto policies poised to integrate the digital assets ecosystem with the traditional economy to an unprecedented degree.

Some analysts say that these developments hold the promise of longer-term gains.

Luke Nolan, a senior analyst at Coinshares, contends that the GENIUS Act, a stablecoin bill signed into law by President Donald Trump last month, is particularly bullish for Ethereum, the network on which most stablecoins and tokenized real-world assets (RWAs) operate.

Trump’s signing of the GENIUS Act, Nolan told Decrypt, “catalysed this pent-up enthusiasm on the token, catching a structural bid as people price what they perceive will be a hugely beneficial regulatory action for Ethereum.”

In a note today, JP Morgan signaled that Ethereum is poised to benefit from “meteoric growth” in the stablecoin sector in the coming years.

David Siemer, co-founder and CEO of digital asset manager Wave, agrees that ETH’s current hot streak is being driven by fundamentals specific to the technical merits of the Ethereum ecosystem.

“There has been an influx of interest from institutions and sophisticated investors who view ETH as more than just a ‘second-place’ crypto,” Siemer told Decrypt. “They see it as the backbone of DeFi, tokenization, and the largest smart contract ecosystem.”

This week, ETH broke $4,700 for the first time since 2021. The token reached a record high price of $4,878 on November 10 of that year, at the peak of the frenzied 2021 crypto bull run.

Sammi Li, CEO and co-founder of JuCoin, the Singapore-based crypto exchange, told Decrypt that this run feels different than four years ago, largely thanks to a Wall Street trend that analysts agree is playing a major role in boosting ETH’s price: massive acquisitions of the token via ETH ETF inflows and corporate treasury buys.

Hoarding Ethereum has recently become so popular in traditional finance, in fact, that some 8% of the token’s global supply is now tied up in ETFs or corporate reserves—a deflationary trend that continues to boost ETH’s price by limiting supply.

“ETH’s rally feels different this time,” Li told Decrypt. “Companies are actually using it for treasury strategies and staking for yield, which locks up supply.”

“Unlike 2021’s meme-driven pump, this has operational fundamentals,” Li continued. “When companies stake their holdings for yield instead of just speculating[…]the network burns ETH through actual activity rather than hype.”

Li therefore estimated that ETH’s current streak could extend well into the fall, and through the end of the year.

On Wednesday, Standard Chartered massively raised its Ethereum forecast, predicting the token could hit $7,500 by the end of 2025, and up to $25,000 by 2028.

Jag Kooner, head of derivatives at crypto exchange Bitfinex, agreed ETH could reach anywhere between $6,000 and $7,500 by the end of the year—assuming, however, continued ETF demand, no major regulatory setbacks, and steady macroeconomic conditions.

Still, the question of whether ETH’s fundamentals are sturdy enough to keep it surging regardless of the macro climate in the coming months is a thorny one.

James Toledano, COO of Unity Wallet, told Decrypt that derivatives data currently indicates ETH traders are more cautious than euphoric. He cautioned that despite ETH’s recent rise, a waning macro environment or recession fears could easily keep the cryptocurrency beneath $5,000 this cycle.

Max Shannon, a senior research associate at Bitwise, told Decrypt he’s also seen telltale signs in recent days of “classic froth-infused behavior” from a general population suddenly fascinated by Ethereum; an environment, he said, that can often precede buyer exhaustion.

Indeed, after weeks of nonstop gains, ETH has fallen 3.3% over the past 24 hours. At about $4,562, the token still remains 6.9% shy of beating its all-time high price.