[Up 46% in 30 Days]
Ethereum, the leading decentralized finance (DeFi) platform, has managed to reach $4,300 in August, after underperforming bitcoin in early 2025. ETH is now closer to its previous ATH of $4,867.17, set on November 10, 2021.
[Pectra Upgrade]
The Pectra upgrade, deployed on May 7, 2025, enhanced Ethereum's staking flexibility, validator rewards, and network performance through features like EIP-7251, which raised the maximum validator balance to 2,048 ETH, and EIP-7702, improving account abstraction.
These upgrades reduced Layer-2 (L2) transaction costs by up to 90% following the earlier Dencun hard fork, making the ecosystem more scalable and user-friendly. Increased staking, with 30% of ETH’s supply locked, further reduces liquid supply, amplifying upward volatility.
[Institutional Adoption]
Additionally, institutional adoption is a major catalyst. Spot Ethereum ETFs, launched in July 2024, have seen increasing inflows, with $2.18 billion in a single week and cumulative volumes surpassing $117 billion by July 2025.
Whale activity is escalating, with companies like Tom Lee's Bitmine Immersion Technologies accumulating 1.2 million ETH units. This institutional buying pressure, coupled with shrinking exchange reserves, creates a supply-demand imbalance pushing prices higher.
[Regulation]
The resolution of the Ripple-SEC case and the White House’s “Crypto Law” in 2025, alongside President Trump’s executive order allowing crypto in 401(k) plans, have created a pro-crypto environment. Europe’s MiCA framework further provides licensing clarity, encouraging institutional participation.
[A Short Squeeze?]
A phenomenon called short squeeze could push ETHUSD into a parabolic advance. Binance’s Ethereum open interest is above $10 billion, and market-wide short positions have surged 500% since November 2024, with a 40% increase in the past week. The environment is optimal for a short squeeze, if the positive sentiment continues.
Written by oinonen_t
