Ethereum has struggled to gain much momentum in recent months while Bitcoin has soared, breaking its all-time price record multiple times in early November—including once more on Friday afternoon.
However, the second-largest crypto by market cap finally managed to breach the $3,000 threshold early Saturday for the first time since August 2, peaking out at $3,056.
Breaking that mark for only the second time this year, Ethereum had fallen to as low as $2,375 on the eve of Election Day.
Yet, with President-elect Donald Trump’s favorable stance on digital assets boosting the broader market, Ethereum’s price is beginning to rise that tailwind, popping 20% over the past week and outpacing Bitcoin’s own 10% jump.
Bitcoin continues to push to new all-time highs, again doing so Friday with a new high mark of $77,23, data from CoinGecko show.
Bitcoin's previous all-time high, set in March, at $73,737, was smashed Tuesday night as Trump’s win began to take shape in an unexpected dominant showing in crucial battleground states, including Pennsylvania.
Even before the election, momentum for the world's largest asset had already been gaining significant ground.
Investors have allocated billions of dollars to spot Bitcoin ETFs this year while Bitcoin’s market dominance compared to Ethereum has grown, hitting a three-year high last month.
Though Ethereum’s sprawling landscape of decentralized finance (DeFi) applications is a pillar of the industry, heavyweights like Uniswap have received enforcement threats from the Securities and Exchange Commission (SEC) this year, contributing to a sense of regulatory uncertainty.
However, that could be about to change.
With a Trump-led change of leadership at the SEC all but certain, Ethereum’s prospects could shift as regulators adopt a more collaborative approach. There are signs that the merits of Ethereum’s proximity to DeFi could be changing, with related tokens notching gains.
The governance token for Aave, a leading decentralized crypto lending platform, has increased 29% in price over the past week to $183, for example.
At the same time, the governance token for Ethena, a decentralized stablecoin protocol, has risen 34% to $0.50 over the same period.
“This shift in narrative to an administration that has signaled they want to address regulatory enforcement actions on a platform like Ethereum is probably more beneficial for Ethereum than it is for other projects like Bitcoin,” Kraken Head of Strategy Thomas Perfumo told Decrypt last week.
While Ethereum’s climb past $3,000 was bolstered by Trump’s win, the asset has still underperformed Bitcoin in terms of year-to-date gains.
Bitcoin may have set a new all-time high price on Friday, but Ethereum is still chasing a peak of $4,878 set in November 2021.
It came within striking distance of its previous all-time high price in March when it crossed $4,000 for a day.
However, the approval of spot Ethereum ETFs appeared less likely following news that the Ethereum Foundation was being investigated by an unnamed “state authority” in March.
The authority turned out to be the SEC, which ended its investigation three months later, according to Ethereum software firm Consensys.
(Disclosure: Consensys is one of 22 investors in Decrypt.)
In May, the regulator approved spot Ethereum ETFs, validating the asset’s regulatory status as a commodity.
Even though the development was viewed as bullish for Ethereum, outflows from Grayscale's Ethereum Trust dampened enthusiasm when the ETFs launched in July, causing downward pressure on the asset's price.
Even though spot Ethereum ETFs had a lackluster debut, the momentum has shifted since Trump’s win. Representing their third-best day of inflows since launch, according to CoinGlass, the class of products took in $80 million on Thursday.
Recently, there has been growing debate around Dencun, an Ethereum upgrade that provided layer-2 networks with a dedicated space for posting transactions earlier this year.
Though the upgrade made layer-2 networks cheaper, some think Ethereum may be worse off, partly because it’s made Ethereum’s overall supply turn inflationary again, as well as a drop in overall fee revenue.
As ETH has languished in the ballpark of $2,500 in recent months, some observers have speculated that scaling networks are taking value away from ETH itself.
"The market maintains a strong bullish sentiment," Nick Forster, founder of onchain options DeFi protocol Derive, told Decrypt last week.
For Bitcoin, option traders are showing a bit of optimism, with a slight positive bias for both the 30-day and 7-day outlooks, Forster added. Ethereum, which is often seen as riskier, is flashing even stronger optimism for those same periods.
That indicates "a surprising upturn in bullish sentiment," he said.
Edited by Andrew Hayward
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