After trailing Bitcoin and faster Layer 1s like Solana for much of this cycle, Ethereum (ETH) has mounted a powerful comeback. From the April lows, ETH has nearly doubled — gaining 65% in the last 30 days to hit $2,750. What’s fueling the sudden momentum?
From the April lows, ETH has nearly doubled — gaining 65% in the last 30 days to hit $2,750. What’s fueling the sudden momentum
Analysts at Bernstein, led by Gautam Chhugani, believe three major shifts are driving Ethereum’s surge and changing the narrative around its role in the crypto ecosystem.
1. Tokenization and Stablecoins Are Reviving Ethereum’s Use Case
Ethereum has struggled to capture attention as Bitcoin dominated the ETF spotlight and Solana lured retail traders. But according to Bernstein, Ethereum’s real utility is back in focus — particularly in stablecoins and tokenized assets.
Payment giant Stripe’s $1.1 billion acquisition of stablecoin platform Bridge and Meta’s renewed stablecoin efforts signal that the next big cycle might revolve around stablecoin payments and tokenized securities — not just store-of-value narratives.
Ethereum currently hosts 51% of all stablecoins and dominates tokenized asset deployments from traditional finance players like BlackRock and Franklin Templeton. With real-world tokenization now a $22 billion market, ETH is becoming the backbone of the new financial infrastructure.
2. Ethereum Layer 2s Are Gaining Real Institutional Traction
Skeptics often argue that Layer 2s don’t significantly boost ETH value. But Bernstein’s data tells a different story: networks like Base, which earned $84 million in revenue last year, are proving Ethereum’s value as the settlement layer for institutional-grade infrastructure.
The report notes that Robinhood’s acquisition of WonderFi, which operates an Ethereum Layer 2, could enable brokers to issue tokenized equities directly on Layer 2 networks. Since these solutions consume ETH for gas , they continue to build structural demand for Ethereum across the financial stack.
3. Short Covering Is Fueling a Tactical Price Squeeze
For months, ETH has been the hedge of choice in delta-neutral crypto strategies, with funds long BTC and SOL while shorting Ethereum. That positioning is now reversing.
As Ethereum reclaims its position as the platform of choice for real-world assets, stablecoins, and institutional finance, short sellers are exiting their trades. Bernstein sees this short squeeze as a key factor behind ETH’s recent outperformance, calling it a “tactical unwind” that could push prices even higher.
Outlook: Ethereum’s Comeback Benefits the Whole Market
Bernstein concludes that Ethereum’s rally isn’t just about ETH. A broader altcoin surge, led by Ethereum, is revitalizing crypto trading activity. That’s a boon for exchanges, brokerages, and retail platforms, all of which benefit from increased trading volumes and broader market participation.
If current trends hold, Ethereum could finally escape its “stuck in the middle” label — and reclaim its position as crypto’s most versatile and valuable platform.
