Crypto Market Surges 8.6% as Bitcoin Hits $103,600, Ethereum Up 26%

The cryptocurrency market experienced a significant surge this past week, with the overall digital asset market capitalization exceeding $3.27 trillion, marking an 8.6% increase from the previous week. Bitcoin (BTC) reached a high of $103,600 on May 8, reclaiming the $100,000 mark for the first time since January. This surge in BTC's value also saw its market dominance rise above 60%, indicating a more bullish sentiment towards the cryptocurrency. This milestone was the third time BTC has broken through six figures, following its previous highs on Dec. 5, 2024, and Jan. 20, ahead of the US President Donald Trump’s inauguration. The rise in BTC's value coincided with Trump announcing a trade deal with the United Kingdom, which may include removing a 10% blanket tariff on all imports.

In the broader crypto space, Ethereum’s Pectra upgrade implemented much-needed improvements for the crypto ecosystem. Following the upgrade, Ether (ETH) saw a 26% price surge, rising from $1,800 on May 7 to over $2,300 on May 9. This upgrade highlighted the ongoing development and innovation within the Ethereum network, contributing to the overall positive sentiment in the crypto market.

Despite the positive developments in the crypto market, the decentralized finance (DeFi) sector faced a mixed bag of outcomes. Messari's “State of Rootstock” report for 2025 showed that merged mining participation surged to an all-time high of 81% in Q1 2025, up from 56.4% in the previous quarter. This surge was attributed to the onboarding of major mining pools SpiderPool and Foundry, which boosted Rootstock's hash power above 740 exahashes per second. This surpassed Bitcoin's total network hashrate recorded in October 2024, marking a more mature phase for the platform's merged mining growth. However, Rootstock's ecosystem faced headwinds as its total value locked (TVL) declined in Q1 2025. Its Bitcoin TVL dropped 7.2%, while the dollar-denominated TVL fell by over 20% quarter-on-quarter. This mirrored a broader downward trend across the DeFi sector, with Ethereum-based DeFi TVL showing a 27% decline in the same period.

In addition to the market developments, the crypto industry also faced security challenges. Crypto hacks in April saw nearly $360 million in assets stolen across 18 incidents, representing an almost 1,000% increase over the amount lost in March. The largest loss came from an unauthorized Bitcoin transfer, where a social engineering attack targeted an elderly American, resulting in a loss of $330 million. Despite these security breaches, the industry continues to rely on limited security measures, as highlighted by Hacken CEO Dyma Budorin in a Cointelegraph interview. Budorin emphasized the need for comprehensive security strategies rather than limited measures such as pentests and bug bounties.

While gaming and DeFi held onto their top spots in the decentralized applications (DApps) ecosystem, artificial intelligence (AI) is slowly catching up. Blockchain analytics platform DappRadar showed that Gaming and DeFi saw 21% DApp dominance in April. However, AI DApps climbed to 16%, up from the 11% recorded in the platform's February data. This trend indicates that AI-powered DApps are steadily carving out their place in the decentralized ecosystem, potentially challenging the dominance of DeFi and gaming in the future.

Bitcoin holders are becoming more confident in using their BTC to borrow funds, as indicated by the growing interest in Bitcoin-backed loans. In a Token2049 interview, Xapo Bank CEO Seamus Rocca highlighted that investors' moods have shifted from short-term speculation to a more long-term outlook on Bitcoin. This confidence comes from broader institutional adoption and Bitcoin's price levels, which are "nowhere near" liquidation. Rocca emphasized that Bitcoin-backed loans allow holders to stay exposed to the asset when facing unexpected expenses, avoiding the need to sell their Bitcoin holdings.

In summary, the cryptocurrency market experienced a significant surge, with Bitcoin reaching new highs and Ethereum's Pectra upgrade driving positive sentiment. However, the DeFi sector faced challenges, with declining TVL and security breaches highlighting the need for comprehensive security measures. The rise of AI DApps and the growing interest in Bitcoin-backed loans indicate ongoing innovation and diversification within the crypto ecosystem. Despite the mixed outcomes, the overall sentiment in the crypto market remains bullish, with continued development and adoption driving growth in the sector.