Cryptocurrency markets have had a blistering May so far, with bitcoin gaining more than 20% over the past 30 days and reclaiming the symbolic $100,000 price level during this momentum. ETH, the cryptocurrency of the ethereum network and the second largest by market cap, surged more than 60% over the same period.
The lull in crypto markets since the start of the year — driven largely by global political and economic uncertainty — was broken by a combination of macro and intra-market tailwinds.
One key catalyst was renewed optimism around US-China trade negotiations. Another was growing evidence of institutional adoption in the US, particularly after the Office of the Comptroller of the Currency gave national banks under its jurisdiction the green light to buy, sell and manage crypto assets in its custody.
One of the key crypto developments was the rollout of the ethereum pectra upgrade — its biggest in years. It introduces technical improvements to make the network faster, cheaper and more user-friendly, especially for developers. Pectra could also lead to lower operational costs and more efficient staking, benefiting stakers, also known as validators, in the long term.
One of the key crypto developments was the rollout of the ethereum pectra upgrade — its biggest in years
The upgrade marks a milestone for ETH. It is the biggest since the merge in 2022, when the network switched to a more energy-efficient way of confirming transactions. The merge seemed to be a buy-the-news event, with the price of ETH dropping in the days after the upgrade.
This time was different. ETH rallied more than 40% in the week after this latest upgrade, convincingly outperforming bitcoin and other large caps during the recent broader crypto rally.
Ethereum, the pioneering smart-contract network, has been criticised for failing to evolve fast enough to keep up with rival crypto platforms such as Solana that offer similar services, much like traditional banks grappling with agile neobanks.
ETH has also been underperforming relative to bitcoin and other assets, which hit new highs in January, while it continues to trade at less than half its November 2021 peak of $4,878. But for investors, the message is clear: ethereum’s developers are still shipping and scaling, and that’s good news for long-term believers.
De Wit is South Africa country manager at Luno
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