Fri, 06/06/2025 - 07:36
When the topic turns to crypto, Bitcoin usually dominates the conversation. But in recent weeks, Ethereum and even XRP have been stealing more than their fair share of the limelight from the OG digital currency. Over the past month, Ethereum has gained 45%, while BTC has managed just +10%. However, in contrast to Bitcoin, which is within touching distance of its all-time high, ETH is still nearly 50% below its 2021 price record of $4,878. XRP did gain around 25% in the space of just 10 days but has since shed much of this value and is only up a modest 3% on the monthly chart. This pattern is mirrored to varying extents across many major altcoins.
It's clear that some major momentum is behind Ethereum, the currency of dApps and smart contracts. With technological upgrades that include plans to increase the network's speed to technical patterns predicting a nascent bull market, there's a lot supporting a continued uptrend for ETH. In this article, we'll look at all these key factors affecting Ethereum and other cryptocurrencies as we examine how the market could develop over the rest of the year.
Big Tech
Wednesday, 4 June, marked one of the biggest changes that the Ethereum network has undergone since the switch to a Proof of Stake model in 2022, a phenomenon later referred to as The Merge. This latest upgrade, dubbed Pectra, consists of 11 major Ethereum Improvement Proposals (EIPs) that will bring improvements to the network's staking experience, introduce new wallet features, and update the blockchain's functionality. Perhaps the biggest of these is EIP-7702, which will enhance wallets with smart contract capabilities.
What's more, at last week's ETHGlobal Prague 2025 conference, Ethereum co-founder Vitalik Buterin laid out an ambitious plan to scale up the Ethereum network's overloaded Layer 1, increasing its ability to keep up with growing demand and provide the transaction speeds needed to establish Ethereum's smart contract supremacy over currently faster and more economical competitors like Solana. He said, "My view is that generally we should scale L1 by about 10x over the next year and a bit," which would certainly put the legacy altcoin in a position to regain market share from other dApp- and smart contract-focused coins while also preventing L2 platforms from restraining the currency's growth potential longer term. If Ethereum can achieve these technological goals, there's no reason why a new all-time high can't be established in the next 12 months.
Tale of two coins
As we touched upon earlier, Bitcoin reached a new all-time high of $111,085 on 18 May but has since lost a little over 5%. By stark contrast, Ethereum and other prominent altcoins are yet to revisit their historical highs of 2021. Despite gaining close to 50%, ETH is still a mile away from its November 2021 ATH of $4,878. That said, the recent uptrend is certainly encouraging and, coupled with a mild correction in BTC, could be the initial sign of significant intramarket divergence. Recent insights from CryptoQuant analyst Crypto Dan have suggested that despite Bitcoin's continued dominance, altcoins' fortunes might be about to shift palpably in the next phase of the crypto market cycle as money gradually moves out of costly Bitcoin into undervalued altcoins.
The Bitcoin retracement has already begun, and market flow data are starting to suggest an emerging preference for altcoins. Indeed, the CoinShares report for last week had Ether leading the ETP net inflows table with $286 million, while Bitcoin investment products saw net outflows of $8 million. More specifically, between 30 May and 2 June, asset management giant Blackrock — the fund behind the leading iShares crypto ETF products — transferred over $560 million worth of BTC to Coinbase Prime and simultaneously acquired more than 27,000 ETH. This combination of factors would suggest that Ethereum could be gearing up for a bull cycle of its own, independent of Bitcoin and perhaps even at its expense.
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