The successful Pectra upgrade also played a key role in shaping Ethereum’s value proposition, analysts argued.
Ethereum’s renewed bullish momentum is a combination of improving fundamentals, demand spike amid a declining supply, according to digital asset bank Sygum.
According to Sygnum’s latest report, Ethereum’s limp performance between 2022 and 2024 and the first half of 2025 has taken a quick U-turn, with a perfect storm of supply shock and institutional demand, coupled with fundamental and regulatory developments, pushing it to record highs after nearly four years.
“The price of Ethereum has risen around 140% since the Pectra upgrade compared to 15% for Bitcoin and 42% for Solana,” the bank noted, due to the “smooth execution of the Pectra upgrade” that added staking and other scaling improvements.
While the fundamental developments were a necessary step, friendly regulation under Donald Trump’s administration catalyzed a chain reaction, Sygnum analysts said.
Although spot Ethereum exchange-traded funds began trading in July 2024, net flows did not pick up until May 2025, when the U.S. Securities and Exchange Commission (SEC) lifted the uncertainty surrounding staking by stating that staking services do not constitute securities offerings.
This development was a critical improvement that triggered a massive influx of demand via ETFs and digital asset treasuries.
While ETFs have accumulated $27.73 billion, according to SoSoValue, constituting roughly 5.31% of Ethereum’s market capitalization, DATs have scooped up $16.02 billion, data from Ethereum Treasuries shows.
Staking services have removed nearly 30% of Ethereum’s supply from circulation, according to a recent Coinbase report, adding to the supply shortage spike.
Apart from ETF and DAT-driven demand, “DeFi, real-world assets, and rollups” are also starting to get more traction, Shivam Thakral, CEO of BuyUcoin, told Decrypt.
Sygnum further highlighted the negative supply shock with the decline in exchange supply data, highlighting the long-term prospects of Ethereum in the ongoing bull run.
“Unless the wider economy or regulators throw a curveball, Ethereum looks set to push higher this cycle,” Thakral explained. “With more upgrades on the way, rising institutional adoption, and clearer rules taking shape, Ethereum is moving beyond speculation to solidify its role as core digital infrastructure.”
On prediction market Myriad, launched by Decrypt’s parent company DASTAN, users are cautiously optimistic about Ethereum’s prospects, with around two-thirds expecting it to top $5,000 this year. Ethereum is currently changing hands at $4,427, up 2.4% in the past 24 hours, per CoinGecko data.
