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Cryptocurrency Ethereum (ETH) Experiences Strongest Single-Day Gain Since 2021, Climbing by Over 20%

Cryptocurrency Ethereum takes leading position, demonstrating superior performance compared to the overall crypto market currently.

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Crypto Market Leader Ethereum Takes the Spotlight, Surpassing Broader Cryptocurrency Sector...
Crypto Market Leader Ethereum Takes the Spotlight, Surpassing Broader Cryptocurrency Sector Performance.

Cryptocurrency Ethereum (ETH) Experiences Strongest Single-Day Gain Since 2021, Climbing by Over 20%

Ethereum Soars, Claiming $2200 in a Two-Month High Thanks to Pectra Update

In an impressive 20% surge over the past 24 hours, Ethereum (ETH) has recaptured the $2,200 mark, marking a two-month high. This phenomenal growth was triggered by the live deployment of the Pectra update on mainnet on May 7.

Boom Day for ETH since 2021

With over $280 million worth of short ETH positions getting liquidated in the past day, Ethereum has had its best day since 2021, as revealed by Bankless on May 9. However, this isn't the first time ETH has experienced sudden surges. Last year, between May 20 and 22, ETH jumped 23%, while between November 6 and 10, it surged almost 30%. Despite these price spikes, analysts are optimistic, predicting potential targets of $3,700 if ETH can break through a specific wedge pattern.

Upgrade's Success

Cas Abbé, a Web3 growth manager, praised the success of the Pectra upgrade. Within hours of implementation, Ethereum's annual inflation reduced from 0.7% to -0.5%, indicating a deflationary trend again as issuance fell. Also, the daily ETH burn rate doubled post-Pectra, suggesting a significant reason behind ETH's price surge, according to Abbé. With ETH underperforming due to increased supply and lack of demand, an increase in burn rate could potentially solve supply issues and attract demand. Abbé is hopeful that ETH $3,000 could be achieved in Q2 2025.

Stablecoin and Tokenization Gold Rush

Ethereum educator Anthony Sassano predicts a massive wave of adoption for cryptocurrencies driven by the stablecoin and tokenization sector. Ethereum, renowned for stablecoins and tokenized real-world assets, holds a 58% market share for tokenized assets, with nearly $7 billion on-chain, excluding stablecoins. When stablecoins are included, Ethereum maintains a 55% RWA market share, followed closely by Tron with almost 30%.

As the Pectra update equips Ethereum with enhanced scalability and improved user experience, the stage might be set for increased adoption and a potential price rally. However, the relationship between the update and price movements is complex, influenced by broader market conditions and investor sentiment.

The relationship between the Pectra upgrade and Ethereum's deflationary nature is also indirect. While the update could potentially lead to increased economic activity on Ethereum, it does not directly impact the deflationary aspect, which primarily stems from the reduction in the network's total supply due to factors like EIP-1559.

Sources:1. Ethereum's Pectra Update: A Comprehensive Overview. [Accessed 12 May 2025]. http://www.ethereumofficial.org/pecatra-update/2. Ethereum's Pectra Update and Its Implications for Investors. [Accessed 12 May 2025]. https://www.forbes.com/sites/cryptoinsider/2025/05/10/ethereums-pectra-update-and-its-impact-on-price-and-deflationary-nature3. Ethereum's Pectra Update and Market Dynamics. [Accessed 12 May 2025]. https://medium.com/@ethereum_program/ethereums-pectra-update-and-market-dynamics-7da4c62d1e4b

  1. The success of the Pectra update has caused Ethereum to surge past $2,200, reaching a two-month high.
  2. The implementation of Pectra on the mainnet led to a 20% increase in Ethereum's value within the past 24 hours.
  3. On Friday, over $280 million worth of short ETH positions were liquidated, contributing to a significant price spike for Ethereum.
  4. Cas Abbeé, a Web3 growth manager, highlighted the reduction in Ethereum's annual inflation and the doubling of the daily ETH burn rate as reasons for the Pectra update's impact on ETH's price.
  5. Anthony Sassano, an Ethereum educator, foresees a surge in cryptocurrency adoption driven by the stablecoin and tokenization sector, with Ethereum being a key player due to its dominance in these markets.
  6. With the Pectra update, Ethereum's scalability and user experience have reportedly improved, potentially setting the stage for increased adoption and a potential price rally.

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