Whether you are an insider or an outsider, these days you must be familiar with the news about Ethereum. The reason is simple, causing Ethereum hodlers to once lament and almost causing Ethereum defenders to be shaken off the bandwagon, Ethereum, with a "3-day 40% surge," has climbed to the top of the TikTok trending list.

Where Did the Surge Come From?

As is well known, Ethereum underwent the Pectra upgrade on May 7th. This most significant network upgrade since early 2024 integrated the Prague execution layer hard fork and the Electra consensus layer upgrade, significantly enhancing Ethereum's performance through 11 improvement proposals. The account abstraction feature (EIP-7702) allows users to flexibly manage their wallets through social media accounts or multisignature schemes, reducing the usage threshold, attracting more users and developers. The staking mechanism optimization raised the validator ETH cap from 32 ETH to 2048 ETH and introduced a flexible withdrawal method, facilitating institutional and individual participation in network security, strengthening the market's confidence in Ethereum's long-term value.

Simultaneously, Pectra optimized the interaction efficiency of Layer 2 networks such as Arbitrum and Optimism, making transactions faster and cheaper, leading to a surge in on-chain activities. As a crucial step for Ethereum's transition from "2G" to "5G," the Pectra upgrade not only increased network vitality but also "recharged confidence" in the market, directly driving the price up.

Related Reading: "Ethereum Surges 22% in One Day, Ethereum Hodlers Stand Up"

It's not just Ethereum itself but also Wall Street that has brought important bullish news.

The world's largest asset management company, BlackRock, proposed to the SEC allowing Ethereum ETF staking. This proposal not only is expected to elevate Ethereum ETF from a mere investment tool to a bond-like "income-generating asset," bringing investors dual returns of capital appreciation and passive income but also has ignited optimism in the market about Ethereum's future potential.

Specifically, BlackRock has proposed a modification to its S-1 filing to allow investors to create and redeem ETF shares directly with Ethereum instead of US dollars (i.e., in-kind redemption). This move, in conjunction with its $2.9 billion BUIDL Fund launched in March 2024, aims to deepen the integration of traditional finance with blockchain. The BUIDL Fund is a tokenized fund operating on the Ethereum network, investing in traditional assets such as US Treasury bonds. This setup is highly attractive to institutional investors as they can not only benefit from the price appreciation of Ethereum but also receive stable cash flow through staking.

BlackRock's Head of Digital Assets, Robert Mitchnick, stated in a CNBC interview in March 2025 that the addition of staking functionality will significantly enhance the appeal of the Ethereum ETF. He admitted that the market demand was lackluster after the launch of the Ethereum spot ETF in July 2024 due to the absence of staking, and introducing staking could be key to reversing the situation.

Meanwhile, the shift in the SEC's stance on cryptocurrency regulation has also fueled this upward trend. During the tenure of the previous SEC chairman, the regulatory stance was consistently tough, categorizing staking under the Howey test as a potential unregistered security. Therefore, when approving the Ethereum spot ETF in May 2024, staking functionality was explicitly prohibited.

However, with Trump back in the White House and Paul Atkins taking over as the chair of the SEC, there has been a noticeable relaxation in crypto regulation. Apart from BlackRock, ETF issuers like Invesco Galaxy, VanEck, WisdomTree, and 21Shares have also submitted applications for similar staking and in-kind redemption.

Related reading: "New Chairman Takes Office for 48 Hours, and SEC Becomes a 'Crypto Daddy'"

However, if staking ETFs are approved, the benefits are likely to extend beyond just price appreciation. The introduction of staking could redefine the role of crypto assets, making them more akin to traditional financial products that generate returns and value appreciation, ultimately driving Ethereum closer to mainstream finance.

Currently, the SEC still has to make several decisions regarding crypto ETFs, including whether to approve spot ETFs for Solana, XRP, Litecoin, and even Dogecoin. With the growing calls for an "altcoin season," Ethereum's strong performance may just be the beginning of a broader crypto market frenzy.

In addition, the Trump family-related DeFi project WLFI is also optimistic about this upward trend, with frequent on-chain activities. According to on-chain data analyst @ai_9684xtpa monitoring, a WLFI affiliated address is currently borrowing coins to leverage long ETH, borrowing 4 million U from Aave to buy 1590 ETH at an average price of $2515.

Has Ethereum's Price Peaked in This Rally?

Regarding this epic surge of Ethereum after half a year of dormancy, it has indeed boosted the community's confidence and hope, also leading to a revival of the entire altcoin market. However, amidst the joy, there are also bearish voices. Below is a summary by BlockBeats based on community discussions.

The optimists point out that the current market structure is similar to the eve of the bull markets in 2016 and 2020, predicting a life-changing surge in the next 3-6 months, with some altcoins possibly achieving astonishing one-day gains of 40%.

@liuwei16602825 stated that this rally signifies the return of the bull market with certainty. There is no need to worry about a pullback. The driving force behind the rise adopts high-cost isolated operations, more afraid of a downturn than any retail investor, and will undoubtedly go all out to defend the position.

Related Reading: "Ethereum Leading the Rally Triggers 'Altcoin Season' Speculation, How Do Traders View the Future Market?"

The bears mainly believe that this rally is different from the 2021 bull market, as the current market lacks the confidence of retail investors entering on a large scale and holding long term, with money rotating too quickly.

@market_beggar observed that a Bitfinex E/B whale has started to close positions and believes that if this whale continues rapid liquidation in the next few days, it can be speculated that the whale no longer sees upside potential in ETH, preparing to exit with profits. The focus should be on the timing of the liquidation.

@FLS_OTC stated that there are still many uncertainties at the macro level, and liquidity cannot support a major bull market. The current stage is a "last hurrah" rather than a complete reversal, and they will continue to remain in a short position.

@off_thetarget believes that after ETH transitioned from POW to POS, it lost the "gold standard" of miner electricity cost support, the staking economic model led to a breakdown in value anchoring; meanwhile, the L2 ecosystem (such as Starknet, zkSync, etc.) suffered from liquidity fragmentation, failing to establish an effective capital inflow mechanism, causing the collapse of the split-disk model; coupled with the ETH community's excessive pursuit of technical narrative at the expense of real-world needs, resulting in a lackluster ecosystem growth. Therefore, he believes that ETH's intrinsic value system has eroded, and the price will inevitably plummet to the 800-1200 range, with a decisive short position taken at 1800.

@Airdrop_Guard, based on the core logic of the "High Probability Trading Strategy," namely when three sets of trading systems with different underlying logics (such as volume exhaustion, price supply and demand, long/short position funding rate, etc.) simultaneously issue a short signal at the same level (2580), it forms a high probability trading opportunity. He emphasizes that these systems must be based on different algorithms and logics (rather than simply overlaying technical indicators), and the current trend of ETH aligns with the short conditions in multiple independent dimensions of his trading system, hence the choice to go short.

Overall, Bitcoin still maintains over 54% of market dominance, institutional funds' continued preference for it may limit the upside of altcoins. The future direction of the market will depend on multiple factors, such as Bitcoin price trends, global macroeconomic conditions, and whether funds can effectively rotate from Bitcoin to the altcoin space.

Although Ethereum's recent leadership in gains has brought optimism, investors still need to maintain rationality as altcoins in different sectors are likely to see diverging trends. Whether this round of Ethereum's rise can usher in a true altcoin frenzy may require more time and conditional cooperation.

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