Ethereum has struggled to gain much momentum in recent months, while Bitcoin has soared, breaking its all-time price record multiple times in early November, including once late last week.

However, the second-largest cryptocurrency by market capitalization finally managed to cross the $3,000 threshold on Saturday for the first time since August 2, peaking at $3,056.

Ethereum surpassed this figure for only the second time this year, falling to $2,375 on the eve of election day.

But thanks to newly elected President Donald Trump’s favorable attitude toward digital assets boosting the broader market, Ethereum’s price is starting to rise thanks to those tailwinds, rising 20% ​​in the past week and completing the 10% jump from Bitcoin surpasses.

Bitcoin continues to aim for new all-time highs, doing so again on Friday with a new high of $77,239, data from CoinGecko shows.

Bitcoin’s previous all-time high, which stood at $73,737 in March, was broken on Tuesday evening as Trump’s victory began to take shape in an unexpected dominant display in crucial battleground states including Pennsylvania.

Even before the election, momentum for the world’s largest asset had already gained significant ground.

Investors have poured billions of dollars into spotting Bitcoin ETFs this year, as Bitcoin’s market dominance over Ethereum has grown, hitting a three-year high last month.

While the vast landscape of decentralized finance (DeFi) applications in Ethereum is a mainstay of the industry, heavyweights like Uniswap have received enforcement threats from the Securities and Exchange Commission (SEC) this year, contributing to a sense of uncertainty about the regulations.

However, that may be about to change.

With a Trump-led change in leadership at the SEC all but certain, Ethereum’s prospects could change as regulators adopt a more collaborative approach. There are signs that the benefits of Ethereum’s proximity to DeFi could be changing, with related tokens generating profits.

The governance token for Aave, a leading decentralized crypto lending platform, has risen in price by 29% over the past week to $183, for example.

At the same time, the governance token for Ethena, a decentralized stablecoin protocol, has risen 34% to $0.50 over the same period.

“This shift in the narrative to a government that has indicated it wants to address regulatory enforcement actions on a platform like Ethereum is likely more beneficial for Ethereum than for other projects like Bitcoin,” Thomas Perfumo, head of strategy at Kraken, told me. Declutter last week.

Although Ethereum’s rise above $3,000 was boosted by Trump’s victory, the asset still underperformed Bitcoin in terms of gains this year.

Bitcoin may have set a new all-time high price on Friday, but Ethereum is still chasing a peak of $4,878 in November 2021.

It came within striking distance of its previous all-time high in March, when it surpassed $4,000 for the day.

However, the approval of spot Ethereum ETFs seemed less likely following news that the Ethereum Foundation was being investigated by an unnamed “state authority” in March.

The authority turned out to be the SEC, which ended its investigation three months later, according to Ethereum software company Consensys.

(Disclosure: Consensys is one of 22 investors in Decrypt.)

In May, the regulator approved spot Ethereum ETFs, validating the asset’s regulatory status as a commodity.

While the development for Ethereum was considered bullish, outflows from Grayscale’s Ethereum Trust dampened enthusiasm when the ETFs launched in July, putting downward pressure on the asset’s price.

While spot Ethereum ETFs had a lackluster debut, momentum has shifted since Trump’s victory. According to CoinGlass, the product class represents the third-best day of inflows since launch, bringing in $80 million on Thursday.

Lately, there has been increasing discussion about Dencun, an Ethereum upgrade that earlier this year provided Layer-2 networks with a dedicated space for placing transactions.

Even as the upgrade made Layer-2 networks cheaper, some think Ethereum may be worse off, in part because it has made Ethereum’s total supply inflationary again, as well as a drop in overall fee revenue.

Still, that hasn’t stopped traders from speculating on further gains.

“The market maintains strong bullish sentiment,” Nick Forster, founder of onchain options DeFi protocol Derive, told me. Declutter last week.

For Bitcoin, options traders are showing some optimism, with a slight positive bias for both the 30-day and 7-day outlooks, Forster added. Ethereum, which is often seen as riskier, exudes even stronger optimism for those same periods.

That signals “a surprising uptick in bullish sentiment” for Ethereum, he said.

Edited by Andrew Hayward and Sebastian Sinclair