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| By Marija Matic |
The cryptocurrency market has roared back to life!
Bitcoin (BTC, “A-”) has reclaimed the six-figure territory and Ethereum (ETH, “B+”) rallied over 40% in a week.
This renewed bullish momentum comes as three major catalysts converge:
- A surprise U.S.-China trade agreement,
- Ethereum's transformative "Pectra" upgrade, and
- Promising regulatory developments.
Let’s break down each one.
Bitcoin Back Above $100K as U.S.-China Relations Thaw
Bitcoin crossed back above $100,000 last week. Now, its all-time high of $108,786, set in January 2025, is in its sights.
Let me put this into perspective.
Bitcoin’s recovery erased a 30% drop that occurred over 77 days … in just 33 days of upward momentum.
This surge coincides with the announcement of a new trade agreement between the United States and China. Negotiated in Geneva, this deal has eased geopolitical tensions.
And it has bolstered global market sentiment, with particular benefits flowing to risk assets including the cryptocurrency sector.
In fact, this renewed risk appetite has extended well beyond fundamentals-driven projects.
Several memecoins, for example, have posted incredible gains in a week:
- DogWifHat (WIF, “E+”): +125%
- Pepe (PEPE, Not Yet Rated): +80%
- Floki (FLOKI, Not Yet Rated): +62%
Smaller memecoins have shown even more dramatic movements.
Moo Deng (MOODENG, “E-”) — a token inspired by Thailand's beloved pygmy hippopotamus — surged an astonishing 538% in just one week.
And Goatseus Maximus (GOAT, “E-”) — an AI-created memecoin with quite a backstory — rose 200% over the same time.
These explosive gains, particularly in assets with little fundamental utility, clearly signal a broader risk-on sentiment sweeping through the crypto market.
When memecoins with dog and cat themes start outperforming established projects, it's a classic indicator that speculative fever is building.
Ethereum Ecosystem Flourishes Following an Upgrade
Ethereum has experienced an even more dramatic price movement than BTC. It rose from about $1,400 in early April to around $2,500 at the time of writing.
Underpinning this price action is the Ethereum network’s most significant technical upgrade since 2022.
The "Pectra" upgrade was implemented on May 7. And it has introduced several key improvements, such as …
- Lower fees for users: Data costs have been reduced by 90% on popular networks like Base and Arbitrum (ARB, “B-”).
- Simpler transactions: Transactions now require just one wallet approval instead of multiple.
- More efficient staking options: The Pectra upgrade allows large holders and institutions to directly stake up to 2,048 ETH instead of the previous 32 ETH limit.
These improvements have attracted significant institutional interest.
In fact, anticipation has been building for months. Glassnode data shows that the concentration of ETH in larger wallets has been steadily increasing since December, with the Herfindahl Index rising from 0.00043 to 0.00110.
That is a clear sign that big investors started accumulating ETH ahead of these changes.
BlackRock has further validated Ethereum's institutional appeal by filing to allow in-kind redemptions for its Ethereum trust. In short, it wants to enable direct ETH buybacks.
This would allow investors to directly exchange ETF shares for Ethereum tokens rather than using cash. And it would mean authorized participants could avoid capital gains taxes since they wouldn’t need to sell ETH for cash during the redemption process.
Bloomberg analyst James Seyffart expects the final deadline for the SEC’s decision on BlackRock’s proposal to come around Nov. 10, 2025.
The Ethereum ecosystem's momentum has lifted related projects, with Layer-2 network Arbitrum gaining nearly 50% and Ether.fi (ETHFI, Not Yet Rated), a decentralized staking protocol, rocketing 116% in a week.
SEC Chair Considers Tokenized Securities
Adding to the positive sentiment is SEC Commissioner Hester Peirce — often called "Crypto Mom" for her pro-innovation stance.
Recently, she personally advocated for the agency to consider a conditional exception that would allow the issuance and trading of tokenized securities at scale using blockchain technology.
Peirce referenced regulatory sandboxes, such as those established in the European Union and United Kingdom, as potential models for the U.S. to follow.
This represents a potential shift from the SEC's generally cautious approach to crypto under former Chair Gary Gensler. And it’s much bigger than just another incremental regulatory development.
It could be the gateway to bringing Wall Street's $100 trillion market onto the blockchain.
Imagine stocks, bonds and other securities living on-chain, with 24/7 trading, instant settlement and global accessibility.
The implications are staggering.
There is, however, one key question that remains: Will regulators embrace truly permissionless blockchains, or insist on walled gardens?
If they choose openness, we could see a democratization of finance unlike anything before — where anyone with a digital wallet, from Manhattan to Mumbai, could invest in U.S. equities.
This historic migration of TradFi into DeFi represents perhaps the ultimate validation of blockchain technology — as the foundation for the future of global finance.
Final Thoughts
The convergence of positive geopolitical developments, technical improvements and regulatory progression has created a perfect storm for cryptocurrency markets.
Sure, the explosive gains in some assets suggest speculative froth is building.
But more important are the fundamental improvements to major blockchain networks and increasing institutional adoption.
Both suggest this bull cycle may have stronger foundational support than previous market cycles.
Unlike the 2017 and 2021 rallies that were predominantly retail-driven, the current cycle features significant institutional participation and real-world utility developments.
For investors, the challenge will be to find a balance in their portfolio.
Long-term fundamentally sound projects may look less appealing with the temptation of short-term speculative gains thanks to the current risk-on environment.
History suggests that while the speculative phase can produce dramatic short-term returns, you shouldn’t ignore those stronger projects.
Ones that can offer sustainable results will be invaluable when the inevitable correction arrives.
Best,
Marija Matić
