TBW - Ethereum: A Turning Point Ahead?
The price of Ethereum has jumped by more than 40% in just a few days, rekindling investor interest in the second-largest asset on the market. This renewed attention coincides with several positive signals, starting with the "Pectra" update, rolled out on 7 May.
It remains to be seen whether this rise marks a genuine return to fundamentals or an essentially speculative move.
Pectra, a technical (and perhaps market) turning point
Long-rumoured, the Pectra update introduces several structural changes for Ethereum. One of the main ones concerns abstract accounts, or "smart accounts", which offer a better user experience: certain addresses can now function as smart contracts, making it easier to manage funds, authorisations and transactions.
Another notable change: the deposit capacity of validators is being increased from 32 to 2048 ETH, a major adjustment for infrastructure operators. The aim is to optimise staking efficiency without compromising network security.
Finally, the update improves the integration of blobs, the data packets essential to the operation of Layer 2 solutions (rollups). In practical terms, this development enables better scalability and lower costs for L2 users.
>> All about the changes to Pectra
In the hours following this update, the price of ETH rose from $1,800 to $2,600, an increase of more than 40%. By way of comparison, Bitcoin gained around 7% over the same period, and Solana 23.5%.
A gap that raises questions, especially as it is rare for an Ethereum update to provoke such an immediate reaction on the market. The 'sell the news' phenomenon clearly didn't happen this time.
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But can we really attribute this upward momentum to the Pectra update alone? A look back at the wider context is in order.
Is Ethereum (finally) catching up with Bitcoin?
For several months, Ethereum had been clearly underperforming against Bitcoin. On 8 May 2025, the ETH/BTC pair hit a low not seen since 2019, reflecting a relative undervaluation rarely seen. Historically, however, such levels have often preceded a catch-up phase.
Between the end of December 2024 and April 2025, ETH had lost up to 66% of its value, compared with a 31% decline for Bitcoin over the same period. In other words, Ethereum was one of the most heavily penalised major assets at the start of the year, before rebounding more violently in recent weeks.
The limited role of ETFs for now
This rebound does not appear to be directly linked to flows into Ethereum ETFs. Since 25 April, these products have indeed recorded net inflows, but in modest proportions: around $13.5 million, a figure far from a massive craze. The explanation for the rebound therefore lies elsewhere.
One factor fuelling speculation, however, is the prospect of an Ethereum ETF incorporating staking. This type of product would enable investors to capture the income generated by securing the network (currently around 3% a year), in addition to exposure to the asset price. To date, no ETF of this type exists in the United States (this is already the case with European ETPs).
Players such as Blackrock have already positioned themselves on the subject, while the Cboe BZX exchange platform has officially filed a proposal to allow the 21Shares Core Ethereum ETF to incorporate a staking function.
No approval has yet been given, but the idea is making headway in institutional circles. And it is probably this anticipation, rather than concrete flows, that is sustaining ETH's momentum for the time being.
More buoyant macro climate for risk assets
Beyond the technical aspects linked to Ethereum, the economic and geopolitical context is also playing a significant role in the recent appreciation of the ETH price. Several signals from the traditional world are contributing to a renewed appetite for risk, from which crypto-currencies are benefiting directly.
Easing tensions between Washington and Beijing
Markets reacted positively to the announcement of an agreement between the United States and China on a reduction in tariffs. This rapprochement, after months of trade tensions, increases visibility on international trade and eases fears of a lasting economic conflict. For investors, this translates into an environment that is seen as more stable and conducive to taking positions in more volatile asset classes.
A de-escalation in Ukraine?
Another element of the context is the negotiations that have begun on a potential peace agreement between Ukraine and Russia. After more than three years of war, encouraging diplomatic signals are beginning to emerge. De-escalation in this area would have repercussions on several fronts: energy, logistics and political stability. And mechanically, a drop in geopolitical tensions tends to favour a return of confidence on the markets.
US inflation under control
On the macroeconomic front, the inflation figures published in the United States also reinforce the prevailing optimism. In April 2025, the price index fell to 2.3%, moving closer to the Fed's 2% target. This dynamic is fuelling expectations of gradual monetary easing in the months ahead. A more accommodative rate policy means more available liquidity, which generally benefits assets with high yield potential - such as cryptos.
In short, ETH's recent rise is not based solely on fundamentals internal to the ecosystem. It is also part of a more relaxed global economic environment, which favours the reallocation of capital towards risky assets.
Ethereum Foundation: an assertive strategic refocus
On 8 May 2025, at the same time as ETH recorded its biggest daily gain for over a year, the Ethereum Foundation published its quarterly report. This document, often scrutinised but rarely highlighted in public debate, illustrates a deeper evolution: a strategic repositioning that combines transparency, budgetary rigour and a reaffirmation of the link with the community.
Cash management more aligned with the ecosystem
In the first quarter of 2025, the foundation allocated $32.6 million across 101 projects via its ESP funding programme. A significant figure that reflects a desire to actively support innovation on Ethereum, particularly in the technical layers, development tools and research.
But it is above all in the management of its own assets that a turning point seems to be taking place. Long criticised for its one-off sales of ETH, the Foundation has opted for a different approach: instead of selling, it has deployed 45,000 ETH (around $112 million) on decentralised finance protocols (Aave, Compound, Spark), generating an estimated annual return of 1.5%. This strategy supports the pillars of DeFi, generates passive income (around $1.8 million a year) and limits selling pressure on the market.
A new governance framework
On an organisational level, the Foundation has begun to refocus. Since the appointment of Tomasz K. Stańczak as co-executive director, roles within the organisation have been redefined. One of the aims is to free Vitalik Buterin from operational tasks, so that he can concentrate on research and long-term issues.
Vitalik Buterin has also been speaking out more and more in recent weeks. In particular, he is proposing to explore the adoption of RISC-V, an open source architecture likely to boost the performance of zkVMs, those virtual machines compatible with zero-knowledge proofs.
On 19 May, he also published a article setting out avenues for improving Layer 1 scalability, with proposals such as increasing gas limits or introducing "partially stateless nodes".
EIP-4444, meanwhile, plans to limit nodes to 36 days of historical data, with the aim of making the network more accessible to users wishing to operate a personal node.
Another sign of openness is the recent publication of an organisation chart detailing the Foundation's internal structure. This document, long called for by the community, marks an effort at transparency honoured by observers. It clarifies responsibilities and gives greater visibility of decision-making levers within the organisation.
>> Ethereum Foundation: An essential but contested organisation
>> Jérôme de Tychey : "My proposals for the Ethereum Foundation"
Ethereum enters an execution phase
Beyond theoretical debates and long-term proposals, the Ethereum Foundation seems determined to anchor its efforts in tangible results. Several areas are now being prioritised: layer 1 scalability, support for layer 2 solutions, and improving the user experience. The aim is clear: to make Ethereum a more efficient, fluid and accessible infrastructure.
>> Ethereum: What is the business model for a layer 2?
Fusaka, the turn to danksharding
The next step is called "Fusaka". This update will introduce PeerDAS (Peer-to-Peer Data Availability Sampling), a decentralised data availability validation mechanism. In concrete terms, nodes will no longer be obliged to store all the data associated with transactions (blobs), but will be able to validate fragments at random. This greatly reduces storage and bandwidth requirements, while ensuring data integrity.
Fusaka will also make it possible to increase the number of blobs per block from 6 to 48, which amounts to a considerable increase in the space available for rollups. The expected impact is major: reduced costs, improved performance and a better user experience - without compromising the decentralisation of the network.
With this update, Ethereum's layer 1 could theoretically process up to 3,500 operations per second compared with around 15 currently (1,200 recorded on average on Solana). An important step for a chain that aims to be the settlement infrastructure of the digital economy.
Glamsterdam, to consolidate the whole
Planned after Fusaka, the Glamsterdam update should continue this optimisation logic. It will focus on improving overall performance, in particular reducing transaction costs, optimising gas consumption, and improving interoperability between layer 1 and L2.
The idea is to make interactions between users and rollup solutions smoother, by bringing these extensions a little closer to the core Ethereum protocol. At this stage, few concrete details have been revealed, but the goal remains the same: to make Ethereum a modular system, capable of managing the growth of its ecosystem without creating bottlenecks.
>> State of the crypto market: the first winners of 2025
Reviewed communications to reach a wider audience
Another notable development: the Ethereum Foundation's communications have become more professional. More regular, more accessible and more outward-looking, it relies mainly on X (formerly Twitter) to share content previously reserved for an informed audience.
Now, technical advances are summarised in an educational way, roadmaps are published with summary visuals, and announcements are aimed at developers and institutional bodies alike. On 14 May, for example, the Foundation presented a new plan entitled "Trillion Dollar Security", with the stated ambition of increasing the total locked-in value (TVL) in the ecosystem. This type of initiative, which has previously received little publicity, reflects a desire to reach out to a wider audience.
In this same logic of openness, the Foundation is supporting Etherealize, an organisation whose mission is to create bridges between Ethereum and traditional financial players. This support is by no means insignificant: it is part of a more global effort to reposition itself strategically, where transparency, accessibility and education have become governance levers in their own right.
Through these signals, it is a foundation in transition that we are observing: less focused on pure engineering, more attentive to the needs of the ecosystem as a whole.
>> Vivek Raman (Etherealize): "We are in the process of raising funds from private players"
The Big Whale's opinion
ETH's recent surge is not due to a single factor. It would be simplistic to see it as a mere announcement effect or a passing fad. This rapid rise is part of an alignment of signals - technical, macroeconomic, community and structural - that are converging at the right time.
The Pectra update is an important technical milestone, at a time when the global economic climate appears to be easing. Steadily falling inflation in the US is restoring room for risk-taking. At the same time, the Ethereum Foundation is reasserting its role with a more proactive stance: more cautious budget choices, clearer support for DeFi, clarified governance, and communication that seeks to unite beyond the usual circle.
Finally, in terms of the markets, ETH was trading in a historically low price zone against BTC, which may have amplified the bullish movement as soon as the first signs of recovery appeared.
Rather than just a speculative bounce, this may be the sign of a new phase for Ethereum - more structured, more legible, and more aligned with market expectations.
>> Fundamental analysis of Ethereum (June 2024)
