In a remarkable shift, Ethereum has captured 8.40% of its market capitalization, largely driven by rising demand from exchange-traded funds (ETFs) and digital asset treasuries (DATs), as detailed in a recent report by digital asset bank Sygnum.
Cryptocurrency-friendly regulatory measures established during Donald Trump’s presidency have significantly influenced capital inflows into Ethereum. Analysts attribute Ethereum’s revitalization not only to supportive policies but also to the successful Pectra upgrade, which has enhanced its value proposition and operational capabilities.
Over the past years, particularly from 2022 to the early part of 2025, Ethereum experienced a period of underperformance. However, the landscape has since transformed dramatically, characterized by a “perfect storm” of declining supply, increased institutional demand, and positive regulatory developments, propelling Ethereum to new heights. According to Sygnum, Ethereum’s price surged by approximately 140% following the Pectra upgrade, a striking comparison to Bitcoin’s 15% increase and Solana’s 42% growth in the same period. This surge is largely attributed to the effective execution of the upgrade, which introduced enhanced staking capabilities and scaling improvements.
Despite beginning to trade in July 2024, the impact of spot Ethereum ETFs did not materialize until May 2025. This change came after the U.S. Securities and Exchange Commission (SEC) clarified that staking services do not qualify as securities offerings, lifting uncertainty. Following this announcement, Ethereum saw a dramatic increase in demand, with ETFs amassing $27.73 billion—accounting for about 5.31% of Ethereum’s market capitalization. Additionally, DATs have gathered $16.02 billion, per Ethereum Treasuries data.
The staking services introduced by the Pectra upgrade have also had a significant impact on Ethereum’s supply dynamics, removing almost 30% of Ethereum from circulation. Beyond ETF and DAT demand, other sectors like decentralized finance (DeFi), real-world assets, and rollups are beginning to gain traction in supporting Ethereum’s ecosystem.
Sygnum’s report further underscores the ongoing negative supply shock reflected in decreasing exchange supply data, which bodes well for Ethereum’s long-term prospects. Shivam Thakral, CEO of BuyUcoin, expressed optimism about Ethereum’s future, stating that unless hindered by unforeseen economic or regulatory events, Ethereum appears poised for further growth. He pointed to upcoming upgrades, rising institutional adoption, and the establishment of clearer regulatory frameworks as catalysts that will help solidify Ethereum’s role within the digital infrastructure landscape.
On the prediction market Myriad, which is affiliated with Decrypt’s parent company DASTAN, there exists a cautious optimism regarding Ethereum’s future. Approximately two-thirds of participants expect the cryptocurrency to reach $5,000 within this year. Currently, Ethereum is trading at $4,427, reflecting a 2.4% increase over the last 24 hours, according to data from CoinGecko.
