In the world of decentralized finance blockchains, Ethereum (CRYPTO:ETH) remains the go-to option for developers and users seeking both the broadest ecosystem to transaction on, as well as the most stable and secure network of its peer group. 

Recent technological upgrades have changed the game for Ethereum investors and users, with the Merge upgrade a few years ago ushering in a proof-of-stake infrastructure, allowing Ethereum to compete for staking market share and enhancing its growth and stability profile over the long-term. Other more recent upgrades have also bolstered investor demand for Ethereum, with many still viewing the world’s second-largest digital asset as one that will retain this title (or eventually challenge Bitcoin for top spot). On that topic, the jury is still very much out. 

That said, I do think there are very strong reasons why Ethereum bulls may continue to view this token as undervalued at its current price of around $3,100 per token at the time of writing.

Here’s why Ethereum could indeed push to a new-all time high in 2026 and breach the $5,000 mark for the first time ever. 

Strong Fundamentals and Capital Flows

Ethereum logo on a gold token

Ethereum’s bull case, as with many other top cryptocurrencies, really relies on the idea that key fundamentals will continue to improve over time. For Ethereum, we could look at overall transaction volume, active wallets, total value locked (TVL) and other key metrics many in this community watch closely. 

On those fronts, we’ve seen limited but meaningful growth. Historically, Ethereum has been among the fastest-growing networks due to its stability and institutional adoption. Recent upgrades, such as the Pectra upgrade in May and upcoming Fusaka upgrade are attempts at improving the utility Ethereum provides on its blockchain. 

With the Pectra upgrade, investors were introduced to the concept of “blobs,” or essentially data storage functionality on Ethereum blocks. Fusaka will increase the amount of data that can be stored on individual blocks, opening up a range of new use cases on this network.

If these upgrades lead to the kind of institutional adoption of key growth areas Ethereum’s developer team is targeting (such as tokenizing real world assets), there’s plenty of fundamental growth to be had long-term. 

Momentum in terms of capital flows into spot Ethereum ETFs has been lumpy, in part due to macro concerns. But I think a positive reception of the upcoming Fusaka upgrade could change this narrative, and lead to consistent institutional capital flows into spot ETFs in 2026, driving these core tokens higher. 

Macro Environment Could Improve

Ethereum token with price chart heading lower

This year has been an odd one for crypto investors, with a strong start to the year seemingly fizzling out. What is typically known as “Uptober,” thanks to October’s historically high returns for Ethereum and other top tokens, has really been a bust. Ethereum’s earlier rally this year has dissipated, with this token now trading around flat over the past 12 months.

That’s something I wouldn’t have expected as of a couple months ago. But given the sheer uncertainty around risk assets overall (with big fluctuations in interest rates, uncertainty around interest rate policy from the Fed, and even bigger concerns around the macro economy and money creation overall), Ethereum and other more speculative assets in the crypto sector have been hit hard. 

I think 2026 will be a pivotal year for Ethereum and its rival tokens. Much of this token’s future performance will depend on how investors view the overall landscape, and how likely a recovery in valuations is over the course of the next year. 

I’m on the fence right now with respect to whether 2026 will be a continuation of what’s been an impressive bull market, or if we’ll see continued downside pressure driven by the macro environment. But I’m also not going to rule out a big move higher to new all-time highs. After all, that’s what Ethereum has historically produced. 

I’ll be strapped in for the upcoming volatility, and be watching this key token’s performance closely.