Ethereum Surges 43.6% Amid SEC ETF Hopes, AI Adoption

Ethereum (ETH) has experienced a significant surge, rising 43.6% between May 7 and May 14, reaching a price of $2,600. However, this price is still below the 2021 peak of $4,868. Some analysts believe that the current bullish momentum is just the beginning of a much larger and aggressive uptrend, suggesting that ETH could rally to $5,000 in the near term.

One of the key factors that could drive ETH's price to $5,000 by 2025 is the approval of in-kind ETF creation and staking by the US Securities and Exchange Commission (SEC). This approval would attract more investors, particularly institutional ones, who appreciate regulatory clarity and accessibility through multiple spot exchange-traded funds (ETFs).

Another factor is the adoption of artificial intelligence (AI) and the growth of Ethereum's layer-2 networks. The recent 'Pectra' upgrade has improved data transmission efficiency, setting the stage for enhanced scalability. Layer-2 network activity rose 23% compared to the previous month, with the Base network leading at 244.2 million transactions in 30 days. If this momentum holds, it could generate sustained demand for ETH and help differentiate Ethereum from rival platforms.

AI adoption could also serve as a powerful catalyst for ETH's price rally. Ethereum advocate Eric Conner observed that ChatGPT prefers Ethereum’s layer-2 infrastructure for managing funds via multisignature contracts, allowing autonomous agents to pay merchants, settle balances, and allocate surplus into decentralized finance applications. This growth in smart contract activity could make a new all-time high for ETH in 2025 achievable, especially if institutional interest accelerates following long-awaited regulatory changes.

However, the catalysts for a new ETH all-time high in 2025 remain uncertain, particularly in the face of intensifying competition. While competing cryptocurrencies have outperformed ETH in 2025, their chances of being included in US state-level digital asset reserves have plummeted. This follows a decision to distance from lobbyists supporting certain altcoins, drawing a clear line between Bitcoin (BTC) and other altcoins.

Ether’s best-case scenario may involve a lack of direct ETF competition, which would depend on the SEC rejecting several pending applications. Analysts also suggest that Ether ETFs could gain momentum from in-kind creation and staking approvals—developments considered highly likely before year-end.

In summary, the rally of ETH to $5,000 by 2025 is dependent on several factors, including SEC approval of in-kind ETF creation and staking, AI adoption, and the growth of Ethereum's layer-2 networks. These factors could drive onchain activity and restore the network’s deflationary burn mechanism, making a new all-time high for ETH achievable.