#ETHMarketWatch
Investors are finally seeing signs of a potential comeback for ether after months of sluggish performance by the second-largest cryptocurrency, thanks to a recent upgrade to the Ethereum blockchain and renewed appetite from investors for risk assets.
Ether
ETHUSD
+0.52%
was up 45% so far in May, on track for its best monthly performance since November, when it gained 47.8%, according to the Dow Jones Market Data. In comparison, bitcoin
BTCUSD
-0.52%
had gained 10.7% month to date, while solana
SOLUSD
+2.52%
, one of ether’s biggest competitors, had climbed 20.6% so far in May.
That’s a significant shift from earlier this year and last year, when ether lagged behind both bitcoin and solana. The token didn’t attract as much institutional attention as bitcoin did, while the blockchain behind ether faced strong competition from rivals like the Solana platform.
To be sure, ether still has a long way to catch up, as the crypto was trading 37% below its record high of $4,105.9 reached in November 2021. Bitcoin, by comparison, was trading only 5% below its own record high reached in January. Bitcoin was up 11.7% year to date, while ether was down 20.7% over the same period.
The most important driver of ether’s recent strength might be the completion of Ethereum’s long-awaited Pectra upgrade last week, the blockchain’s biggest overhaul since 2022, according to Alex Cheung, over-the-counter trader at crypto broker Abra Prime. The upgrade was supposed to improve user experience and lay the groundwork for future upgrades, allowing Ethereum to become cheaper and faster while handling a growing number of transactions.