Ethereum (ETH) has performed impressively recently, with a strong rise over two consecutive days in mid-August, successfully breaking through the $4000 mark, sparking discussions in the market. What are the driving factors behind this surge?

First, the continuous inflow of institutional funds has become a key driving force. Since the Ethereum spot ETF received regulatory approval in July 2024, a large amount of institutional capital has flooded in. According to statistics, the net inflow into the ETF exceeded $2.1 billion within just one week in July, and this momentum continued in August. Such a massive influx of funds has undoubtedly exacerbated the supply and demand imbalance of Ethereum, driving its price to rise continuously.

Secondly, the upcoming Pectra upgrade is also injecting strong confidence into the market. Scheduled for release in mid-2025, the Pectra upgrade aims to significantly enhance staking efficiency, which is expected to attract more institutional investors and encourage more retail participation in Ethereum staking. This upgrade is anticipated to reduce market selling pressure and provide long-term support for the ETH price.

It is worth noting that although the U.S. Producer Price Index (PPI) year-on-year for July was higher than expected, it does not seem to have had a significant impact on the upward momentum of Ethereum. This may indicate that the cryptocurrency market is gradually forming its own operational logic, with a reduced sensitivity to traditional economic indicators.

With institutional funds continuing to flow in and technological upgrades on the horizon, the future development of Ethereum is promising. However, investors must remain cautious and closely monitor market trends and potential risks.