Ethereum (ETH) recently surpassed its 2021 all-time high, reaching over $4,900 before experiencing a short-lived correction. Despite this decline, Swiss cryptocurrency bank Sygnum Bank conducted an in-depth analysis of the factors driving Ethereum’s recent surge. Sygnum’s research suggests that Ethereum’s rebound is fueled by three key drivers: improved fundamentals, decreased supply, and increased demand. This comes after a period of weak performance between 2022 and 2024, coupled with a supply shock, rising institutional interest, and regulatory developments, ultimately leading to the record-breaking price surge. Sygnum highlights the Pectra upgrade as a key catalyst for this resurgence. The upgrade has led to an approximate 140% increase in ETH prices compared to Bitcoin’s 15% and Solana’s 42%. This growth is attributed to the seamless execution of the Pectra upgrade, which introduced staking and other scalability enhancements. Another significant factor driving demand is the increasing adoption by ETFs and Data-tokens (DATs). According to Sygnum, these two asset classes make up approximately 8.40% of Ethereum’s market capitalization. SoSoValue reports that ETFs have accumulated $27.73 billion in holdings, while DATs have amassed $16.02 billion, according to data from Ethereum Treasuries. Additionally, Coinbase research indicates that staking services have removed approximately 30% of Ethereum’s supply from circulation, creating a growing supply shortage. Sygnum analysts also point out the impact of decreased stock market supply data as further evidence of this supply shock. The long-term outlook for Ethereum remains positive, with experts anticipating continued bullish momentum. This information is not investment advice and should not be considered as such.