Just a few months ago, Ethereum was scraping multi-year lows and sentiment was in the gutter.

Now it’s one of the hottest trades in crypto.

It closed out May at $2,530 after nearly tapping $2,800 last week. It’s a sharp turnaround from early April, when it plunged to $1,400, marking its lowest point in over two years.

Prediction market bettors are putting their money on even more upside.

Despite a fairly even mix of bets between Ethereum jumping to $2,700 or slipping back to $2,300, traders are leaning bullish. The chances of a move above $2,800 outweigh those predicting a deeper breakdown.

“Ethereum’s trifecta of scaling momentum, supply squeeze dynamics, and DeFi innovation positions it for volatility-sensitive growth,” crypto research firm CoinMarketCap wrote on June 1.

CoinMarketCap noted several factors driving the price, including upgrades to the network and institutional adoption. It also warned that while Wall Street increasingly taps into crypto in general, macroeconomic uncertainty may kneecap Ethereum’s comeback.

Institutional confidence

The second presidency of Donald Trump has incentivised traditional finance players to venture further into digital assets, analysts say.

Lately, Ethereum has been one of the winners of that.

Spot Ethereum exchange-traded funds have built steady momentum, racking up $578 million in inflows over the past three weeks. Nearly half of that came last week alone, when inflows hit $286 million.

By contrast, Bitcoin ETFs saw $157 million in outflows last week, snapping a six-week streak of net inflows.

Derivatives traders are leaning in too. Ethereum’s open interest on Deribit has surged past $5 billion, with over two million contracts outstanding.

Call contracts outnumber bearish puts by more than two-to-one, meaning the bulk of traders are leaning bullish.

At the same time, big investors have returned. One whale bought almost $5 million worth of Ether on June 1, CoinMarketCap noted.

“Whale accumulation and ETF inflows signal institutional confidence,” the firm wrote.

Fundamental tailwinds

Beyond price action and ETF flows, Ethereum is seeing a wave of structural progress and drivers.

At the ETH Global event in Prague between May 30 and June 1, Vitalik Buterin outlined plans to scale Ethereum’s base layer 10 times over the next year through upgrades like delayed execution and distributed storage.

“That would be a good time to take a breather and verify we’re doing okay on decentralisation,” he said, suggesting a future hard fork to address things like censorship resistance and account abstraction.

While some advocate for a more aggressive roadmap, Buterin added, “I don’t believe in the 1000x overnight camp, but I do think there’s a lot of room to scale safely.”

Ethereum also just got its own version of the Michael Saylor playbook.

Online casino firm SharpLink Gaming raised $435 million in Ether for its treasury, sending its stock up 2,700% in a week.

It’s possible that if the market starts perceiving and pricing in bigger upsides for Ethereum, more corporate treasuries could start to pivot to it over Bitcoin.

Staking ETFs could also be on the horizon. The SEC recently clarified that solo and delegated staking don’t qualify as securities offerings, opening the door for more Ethereum-linked products.

While two early filings hit regulatory pushback last week, analysts like Bloomberg Intelligence’s James Seyffart say approval is still a matter of “when, not if.”

Headwinds

To be sure, macroeconomic uncertainty risks scuppering the rally. For instance, Trump’s on-and-off-again trade war with half of the world’s nations has rattled cryptocurrency prices over the past five months.

The White House’s tariffs are on pause until July 9.

“Ethereum price prediction hinges on whether institutional tailwinds can outweigh technical and macroeconomic headwinds,” CoinMarketCap wrote.

Crypto market movers

• Bitcoin has gained 0.3% over the past 24 hours and is trading at $104,350.
• Ethereum is down 0.7% in the same period to $2,485.

What we’re reading

Kyle Baird is DL News’ Weekend Editor. Got a tip? Email at kbaird@dlnews.com.