The following is an analysis of the three main driving forces behind Ethereum (ETH) price breaking the $5000 mark:

### 1. Spot ETF Capital Inflows and Regulatory Policies

- **ETF Approval and Capital Inflows**: If the U.S. Securities and Exchange Commission (SEC) approves the creation and staking functionality of physical Ethereum ETFs, it will significantly lower the entry barrier for institutional capital. Institutions such as BlackRock have proposed supporting staking Ethereum ETFs, a model similar to 'crypto bonds' that allows investors to redeem physical assets for profits, likely attracting traditional capital inflows.

- **Regulatory Policy Impact**: Clarity and accessibility of regulatory policies are crucial for institutional investors. As the only alternative to spot Bitcoin ETFs, if the SEC denies ETF applications from other competitive cryptocurrencies, Ethereum ETFs will have a competitive advantage.

### 2. Pectra Upgrade and Technological Development

- **Pectra Upgrade**: The Pectra upgrade has improved Ethereum's data transmission efficiency and enhanced network scalability. Layer-2 network activity has significantly increased, with the Base network reaching 244.2 million transactions in 30 days, a 23% increase from last month. This technological advancement lays the foundation for the widespread application of Ethereum, driving demand for ETH.

- **Artificial Intelligence Applications**: The development of artificial intelligence presents new opportunities for Ethereum. Applications like ChatGPT are more inclined to utilize Ethereum's Layer-2 infrastructure for fund management, using multi-signature contracts for payments, settlements, and fund distributions. If the AI-driven trend can develop comprehensively, smart contract activity is expected to grow tenfold from current levels, thus driving ETH prices significantly higher.

### 3. Market Sentiment and Investment Demand

- **Market Sentiment and Investment Enthusiasm**: From May 7 to 14, the ETH price surged 43.6%, showing strong bullish market sentiment. The phenomenon of 'short squeeze' in the futures market, where shorts were liquidated for $438 million, far exceeding the $211 million of longs during the same period, further accelerated the price increase.

- **Growth in Investment Demand**: With the easing of global trade tensions, overall market risk appetite has rebounded, and crypto assets, being high Beta assets, have rapidly benefited. Additionally, institutional interest in Ethereum may accelerate after regulatory reforms, further propelling ETH prices upward.

# Trading Operations