- Ethereum Surges 40% Amid Trade Optimism and Pectra Upgrade: Ethereum spiked from $1,800 to $2,500 last week, driven by optimism from U.S.-China trade talks and the successful rollout of the Pectra upgrade, which boosted network scalability and investor confidence.
- Institutional Hesitation Despite Rally: While Bitcoin ETFs saw $600 million in inflows, Ethereum ETFs experienced $55 million in outflows, indicating that institutional investors remain cautious despite the price surge.
- Outlook Hinges on Institutional Support and Regulatory Clarity: Analysts are split on ETH’s next move — some see a path to $4,000 by Christmas, but others warn that without sustained institutional momentum, the rally could stall and enter a consolidation phase.
Ethereum shot up nearly 40% last week, climbing from around $1,800 to $2,500 as risk appetite crept back into the crypto space. The move came after U.S. President Donald Trump announced positive trade talks with China and a limited deal with the U.K., injecting some macro optimism into both equities and digital assets.
Stocks rallied hard on Monday, with the Dow, S&P 500, and Nasdaq posting their biggest one-day gains in months, driven by strength in tech and industrials. Meanwhile, Ethereum led the charge in crypto, outpacing Bitcoin and other major assets. But can it keep up the pace?
Why Is Ethereum Outperforming Bitcoin?
For the past couple of years, Ethereum’s price has mostly lagged behind Bitcoin. But in the past two days, ETH has been running circles around BTC. Analysts are pointing to Ethereum’s successful Pectra upgrade — its latest major network upgrade — as a primary catalyst.
According to three analysts who spoke with Decrypt, the upgrade was executed flawlessly, easing investor concerns over network efficiency and scalability.
“The market is poised to re-rate Ethereum given how well Pectra was implemented,” said Matteo Greco, research analyst at Fineqia International. “But the big question is: will the fundamentals follow the hype?”
ETF Flows Paint a Different Picture
Despite the price rally, not everyone is convinced. Bitcoin spot ETFs recorded $600 million in net inflows last week, while Ethereum ETFs saw $55 million in outflows, suggesting that institutional investors might still be on the sidelines when it comes to ETH.
“The scale and strength of the price recovery, combined with modest outflows from Ethereum ETFs, suggest that crypto-native investors, not institutions, have been driving the surge,” Greco added.
Ethereum’s Pectra Upgrade: A Game-Changer?
On May 7, Ethereum rolled out Pectra, its biggest upgrade since Dencun last year. The update included several quality-of-life improvements, like better staking limits and smoother wallet usability.
“The Pectra upgrade went live without any major hiccups, boosting confidence in Ethereum’s ability to scale,” said Sean Dawson, Head of Research at Derive.xyz. “Now, it’s a question of maintaining that momentum.”
Derive’s models now assign a 20% probability that Ethereum could hit $4,000 by Christmas — up from just 9% last week. But as James Toledano from Unity Wallet noted, there’s still skepticism in the air:
“This feels like a sentiment-driven rally rather than a fundamentals-driven one. Without more institutional buying and regulatory clarity, we could see a period of consolidation before any new highs are tested.”
Bottom Line — The Road Ahead
Ethereum’s Pectra upgrade has certainly lit a fire under the asset, but questions remain about whether the rally can hold. With volatility spiking and Bitcoin taking a breather after hitting $105,800, all eyes are on Ethereum to see if it can maintain its upward momentum or if a retracement is on the cards.
