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Ethereum occupies a unique place among blockchain platforms. As the world’s first blockchain to support decentralized finance (DeFi) apps and smart contracts, it has long served as a bellwether for the broader crypto market. As the native platform for ETH, the world’s second-largest cryptocurrency by market capitalization, Ethereum remains the go-to platform for developers, investors, and institutions looking to engage with DeFi infrastructure.
This was evident in April, as the ETH to USD rate not only responded to a decline in the U.S. market but also rebounded more quickly than other cryptocurrencies. Here are three key factors that have contributed to increasing the resilience of Ethereum’s dollar value.
A Growing Network
Unlike Bitcoin, Ethereum employs a modular network structure that enables the swift testing of off-chain upgrades before integrating them into the main network. This is how Ethereum has managed to keep pace with the growing demand for decentralized finance applications. While other blockchains like Solana currently boast faster transaction speeds and lower fees, Ethereum’s ability to scale means that, theoretically, there is no upper limit or ceiling to how fast Ethereum can become.
Ethereum is also pursuing other upgrades. One new proposal is to implement an automatic increase in the blockchain’s gas limit, potentially enabling Ethereum to process up to 3.6 billion units, up from the current 36 million. If the proposal is accepted, crypto experts suggest that the ETH transaction rate could rise to over 2,000 transactions per second (TPS), doubling Solana’s current rate. Ethereum’s current transaction processing speed is only 15 TPS. This would enable Ethereum to operate with extremely low transaction fees, which is likely to increase investment from both traders and large institutions.
Meanwhile, investors are also looking forward to Ethereum’s Pectra upgrade, which is scheduled to arrive on May 7. Among many other improvements, Pectra is expected to increase the amount of ETH users can stake on the chain.
The Rise of Smart Contracts
The second factor driving Ethereum’s resilience is the rising demand for smart contracts, a feature for which the Ethereum blockchain was specifically designed. Smart contracts are scripts that run when specified conditions are met, automating payments or data transfers without the need for a third party to broker the transfer. Smart contracts are already being utilized in a diverse array of applications. Game developers can automate the distribution of crypto rewards to players who complete specific in-game tasks or reach certain levels. Artists and musicians can collect automated payments when their NFTs are purchased or traded.
While other blockchains, such as Solana and Cardano, also now support smart contracts, Ethereum was the first to do so and has become associated with DeFi and smart contracts in the public mind. This has proven a strong tailwind behind Ethereum, allowing the blockchain to sustain network activity even in periods of macroeconomic uncertainty.
Ethereum ETFs: A Volatile But Promising Trend
The third factor keeping the ETH to USD exchange rate advantageous for ETH investors is the regulatory approval for Ethereum to issue exchange-traded funds (ETFs). With both Bitcoin and Ethereum able to issue ETFs, high-net-worth investors, banks, and other large institutions have begun trading in spot ETFs and purchasing crypto reserves.
Ethereum ETFs experienced a rocky run in March and April, with many consecutive days of outflows, which depressed the ETH to USD rate. However, Ethereum ETFs appear to be rebounding, with several consecutive days of inflows in the past week.
If there is a lesson to be learned from March and April 2025, it is that the Ethereum price remains highly volatile, with the ETH to USD rate changing significantly by the hour. With ETH beginning to climb out of several bearish weeks that reduced ETH prices to 2018 levels, the network itself is beginning to exhibit signs of renewed vigor.
Ethereum’s Future: A Bull Run in the Making?
With institutional interest growing, Ethereum ETFs rebounding, and major developments such as Pectra and the gas ceiling proposal in the works, NASDAQ and Binance analysts are watching closely. If these developments unfold as expected, they could set the stage for Ethereum’s next major bull run, solidifying its role as both a technology leader and market bellwether in the broader crypto space.
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