Ethereum’s price springs back into action after Pectra upgrade
The price of the second-largest cryptocurrency has increased about 20% since Thursday, lifting meme coin pepe up with it.
Ethereum has seen its largest daily gain in the past four years, outpacing the broader crypto markets.
The price of ethereum climbed to as high as $2,411 on Friday, representing a roughly 20% increase since yesterday, before settling in the $2,300 level. The cryptocurrency now has a market capitalization of nearly $279 billion, second only to bitcoin.
The price action of ethereum comes two days after developers activated the Pectra upgrade, which aimed at making the network more efficient, scalable, and user-friendly.
“The ETH price action seems to be associated with the Pectra upgrade that just occurred,” according to Ogle, pseudonymous crypto sleuth and founder of blockchain network Glue. Ogle said Pectra resulted in increased confidence among investors since it was a complicated upgrade that focused on making ethereum usage better for users.
“For a while, ethereum has suffered from what has felt like stagnancy, so this must have signaled to folks that indeed, they’re still working hard over there and innovating,” Ogle said.
Ethereum has also improved its price strength relative to bitcoin as the first cryptocurrency has seen smaller gains. Seth Ginns, managing partner and head of liquid investments at CoinFund, argued ethereum was due for a breakout after prolonged underperformance against bitcoin.
“Once it started to gain vs BTC, the story became ‘ETH is number 1 for total value locked, it’s the top chain for traditional finance engagement, it has a large percentage of stablecoin usage, it’s the second-largest market cap. Why don’t you own it?’” Ginns told Sherwood News.
“ETH had not had three straight weeks of outperforming bitcoin in almost two years, so investors were watching to see if this week would change that streak. As it started to outperform, a snowball effect developed,” Ginns added.
As ethereum was rising, so was one of its native meme coins, pepe. Meme coins like pepe are often viewed as leveraged plays on ethereum. The market cap of the frog-based token rose as high as about $5.6 billion on Friday, a more than 60% increase since early Thursday. Pepe’s recent performance makes it the top gainer among meme coins.
Meanwhile, pepe has seen a jump in trading volume, increasing from less than $1 billion on Thursday to about $4.8 billion in the last 24 hours across all platforms tracked by CoinGecko. Scott Guenther, head of finance for exchange infrastructure provider 0x, told Sherwood, “Internally at 0x we saw a 123% increase in PEPE volume from 5/4-5/8.”
The substantial trading volumes behind ethereum and pepe’s rallies are signals of market conviction instead of temporary enthusiasm, per Dillon Liang, cofounder of Blueprint Finance. “Capital flows are splitting into two distinct patterns: institutional money gravitating toward infrastructure plays like ethereum, while retail speculation floods into high-volatility meme coins,” Liang told Sherwood.
Sage D. Young is a crypto journalist who’s written for CoinDesk and Unchained.
