Ethereum hits new ATH: Are the crypto bulls back in town?

After years of relative underperformance compared to its big brother Bitcoin, Ethereum (ETH) is enjoying a new moment in the sun.

Late on Sunday night, it briefly passed US$4,900 for the first time, breaking its previous all-time high from 2021, before pulling back.

And that could be the catalyst crypto bulls have been waiting for. 

There's an extremely strong correlation between the performance of ETH and the performance of the wider crypto "altcoin" market. 

Basically, the better ETH performs, the better cryptocurrency does as a whole. 

Ethereum vs the crypto alt market

So a new ETH all-time high is something for investors to pay attention to. 

Bitcoin also recently set a new all-time high when it passed US$120,000 for the first time this month. 

But the rest of the market had, for a long time, been left in its wake, as Bitcoin saw its value proposition reach mainstream and institutional acceptance with the launch of dedicated ETFs and dedicated treasury companies. 

Eth out from the ether

Ethereum and other cryptocurrencies have been harder sells to traditional finance, says Monochrome's Bridget Nichols.

"The Ethereum value proposition relies more on network usage, DeFi adoption and developer activity (which is not as straightforward as Bitcoin's digital gold store-of-value narrative)," says Nichols. 

"This is still being understood by investors and commentators alike. As an infrastructure layer, Ethereum also faces significant competition from other blockchain networks."

But the narrative could be changing.

Greater certainty in the form of the GENIUS and CLARITY Acts solidified the Trump Administration's commitment to cryptocurrency regulation and potentially carves out a role for decentralised financial (DeFi) platforms, of which Ethereum is the clear leader.

The launch of Ethereum ETFs and dedicated ETH treasury companies is also helping introduce the digital asset to traditional finance markets. 

The US Federal Reserve signalling rate cuts should be on the way could be another bullish catalyst. 

Justin Arzadon, Betashares' head of digital assets, says awareness is growing around Ethereum.

"While its use case has always been understood by many investors, Ethereum has always played second fiddle to the far-better-known Bitcoin in terms of conversations about digital assets," says Arzadon. "However, in recent weeks, its own role in the digital assets ecosystem is becoming clearer as investors wake up to its potential."

Global X's Justin Lin says a confluence of factors means Ethereum is now ready to play catch-up. 

"Ethereum is in a real sweet spot right now. It’s enjoying a real surge of tailwinds including clearer stablecoin policy, high-profile crypto IPOs and a long-awaited shift from Bitcoin season to alt-coin season."

"The reason why it has taken so long for Ethereum to catch up to Bitcoin is likely an issue of policy clarity. We saw Bitcoin start its new bull cycle in early 2024 when Bitcoin ETFs were officially approved in the US," said Lin.

"What followed was a massive influx of institutional and investor adoption. Ethereum doesn’t quite have the cult-like following of Bitcoin, and it also offers a fundamentally different proposition to Bitcoin. 

"While Bitcoin is slowly becoming an established store of value, we think Ethereum is an indicator of blockchain technology adoption. So, for Ethereum to start catching up, investors required a bit of an extra push. That push is now here in the form of policy clarity."

The next big bull run?

The stars may be aligning for long-suffering crypto investors who have seen the market struggle since the 2021 bull run crashed down to Earth, culminating in the collapse of crypto exchange FTX in 2022.

"The crypto market seems to be on track to reignite a bull run, with Ethereum's ATH potentially triggering what many call "alt season" - a period when capital flows from major cryptocurrencies into smaller altcoins," said Nichols. 

Lin agrees. "Ethereum’s strong run will likely be seen as the start of this cycle shift," he said. "We expect Ethereum to continue outperforming in the second half of 2025, with other major altcoins such as Solana, Polkadot, Avalanche, and others likely to follow."

For investors yet to dip their toes in the water, now could be the time to reconsider.

"There remains lingering caution in certain investor cohorts about the asset class, however, the long-term trajectory has generally seen greater adoption in portfolios," says Arzadon.

"That being said, investors should not get ahead of themselves, and should continue to build well-rounded portfolios that contain appropriately sized allocations to the asset class," he said. 

"Even in small amounts, digital assets can play a positive role in a broader portfolio that contains allocations to equities, bonds and commodities like gold."