Ethereum Surpasses $3,500: Can It Challenge Bitcoin’s Dominance?

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In recent days, Ethereum (ETH) has surged to new all-time highs, capturing the spotlight in the cryptocurrency market. On May 6, ETH reached an intraday high of $3,548.41, marking a nearly 30% increase from its May 1 low of $2,732. Since the beginning of 2025, Ethereum has seen a staggering price gain of up to 389%, outpacing many digital assets and drawing significant investor attention.

👉 Discover how Ethereum’s momentum is reshaping the crypto landscape

Ethereum’s Market Capitalization Reaches Historic Highs

Ethereum’s rise isn’t limited to price alone. According to AssetDash, its current market capitalization stands at approximately $402.3 billion, placing it 17th on the global asset value ranking—surpassing retail giant Walmart and nearing established blue-chips like Samsung and Johnson & Johnson.

This surge reflects more than speculative momentum. It underscores Ethereum’s growing role as the foundational layer for decentralized innovation across finance, identity, and digital ownership.

Why Is Ethereum Gaining So Much Momentum?

William, Chief Researcher at OKX Institute, identifies two primary drivers behind Ethereum’s breakout performance.

1. Value Accrual at the Protocol Layer

Unlike traditional internet protocols—such as TCP/IP—that enable communication but don’t capture economic value, blockchain networks like Ethereum are designed to concentrate value at the protocol level. The native token, Ether (ETH), is essential for network operations:

Since the DeFi boom began in mid-2024, total value locked (TVL) in Ethereum-based protocols has grown exponentially. As more users interact with lending platforms, decentralized exchanges (DEXs), and yield-generating protocols, demand for ETH increases—not just as a speculative asset, but as functional infrastructure fuel.

This fundamental shift—where the base layer becomes economically valuable—sets Ethereum apart from legacy tech stacks and reinforces long-term price support.

2. Institutional Adoption Accelerates

The second major catalyst is growing institutional validation. In late April 2025, the Toronto Stock Exchange launched three Ethereum ETFs, offering regulated exposure to Canadian investors. This marks a pivotal step toward mainstream acceptance, similar to how Bitcoin ETFs boosted BTC adoption in prior years.

Additionally, the European Investment Bank (EIB) announced plans to issue digital bonds on the Ethereum blockchain. Such use cases validate Ethereum not only as a store of value but also as a secure, scalable platform for real-world financial instruments.

These developments signal a maturing ecosystem where Ethereum serves both retail innovators and global financial institutions.

Bitcoin’s Dominance Faces Pressure

While Ethereum soars, Bitcoin (BTC) has entered a period of consolidation. After a strong rally earlier in the year, BTC has been trading sideways, leading to speculation about whether its long-held dominance in the crypto market is weakening.

Bitcoin’s market cap share—the percentage of total crypto market value it represents—has gradually declined from over 70% to below 55%. Meanwhile, altcoins like Ethereum, Dogecoin (DOGE), Ethereum Classic (ETC), and Bitcoin Cash (BCH) have gained traction.

William compares Bitcoin to "the茅台 of crypto"—a premium, high-value asset that commands loyalty but becomes less accessible as prices rise. With BTC trading at high absolute levels, new capital may find better risk-reward opportunities in undervalued altcoins.

👉 See why investors are diversifying beyond Bitcoin

Is Ethereum Poised to Take Over?

Despite Ethereum’s momentum, experts remain cautious about declaring it a successor to Bitcoin. William argues that Bitcoin’s role as digital gold remains unchallenged. Its scarcity, brand recognition, and first-mover advantage make it the go-to safe-haven asset during market uncertainty.

The current dip in Bitcoin dominance is better understood as a natural phase within a broader bull market. During such periods, capital rotates into high-growth altcoins, temporarily diluting BTC’s share. However, history suggests that when bear markets return, investors flock back to Bitcoin, causing its dominance to rebound.

Thus, rather than a zero-sum battle, we’re witnessing a maturing ecosystem where multiple cryptocurrencies serve distinct roles:

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These terms reflect what users are actively searching for when analyzing market shifts and investment opportunities in 2025.

Frequently Asked Questions (FAQ)

Q: What caused Ethereum’s recent price surge?
A: The rally was driven by strong DeFi activity increasing demand for ETH as gas and collateral, combined with institutional developments like ETF approvals and bond issuance on the network.

Q: Has Ethereum surpassed Bitcoin in market cap?
A: No. While Ethereum has grown significantly, Bitcoin still holds a larger market capitalization. However, Ethereum’s share of the total crypto market has increased relative to BTC.

Q: Are Ethereum ETFs available outside Canada?
A: As of April 2025, Canada led with three approved Ethereum ETFs. Other regions are evaluating similar products, but widespread availability outside North America is still pending regulatory decisions.

Q: Can other blockchains challenge Ethereum’s DeFi dominance?
A: Competitors like Solana and Cardano offer alternatives, but Ethereum maintains over 90% of DeFi TVL due to its mature developer community, security track record, and network effects.

Q: Will Bitcoin lose relevance if Ethereum grows?
A: Unlikely. Bitcoin and Ethereum fulfill different roles—BTC as digital gold, ETH as programmable money. Growth in one doesn’t necessarily diminish the other; instead, they contribute to overall crypto adoption.

Q: What price targets are analysts predicting for Ethereum?
A: Some analysts suggest ETH could reach $4,000–$5,000 before achieving equilibrium relative to Bitcoin’s valuation metrics, especially if staking adoption and Layer 2 scaling continue to expand.

👉 Explore real-time price data and forecasts for Ethereum

Final Thoughts: A Multi-Layered Crypto Future

Ethereum’s record-breaking performance highlights a pivotal shift in how value is created and captured in digital economies. Rather than viewing its rise as a threat to Bitcoin, it's more accurate to see it as part of a broader diversification within the cryptocurrency ecosystem.

As decentralized finance matures and institutional interest grows, assets like ETH are transitioning from speculative tools to foundational infrastructure. Meanwhile, Bitcoin retains its status as the most trusted reserve asset in crypto.

For investors, the takeaway is clear: understanding the unique roles each major cryptocurrency plays can lead to smarter allocation strategies—balancing safety, yield potential, and long-term innovation.

The future isn’t about one coin replacing another—it’s about building a resilient, multi-chain financial system where both pioneers coexist and thrive.