Cryptocurrency is in the spotlight again this week as prices continue to storm higher.
As of Wednesday morning Australian time, Bitcoin (CRYPTO: BTC) was trading 0.21% higher at US$105,692.10 (AU$163,584.89).
The world's original and largest cryptocurrency has jumped 9.76% over the past month, recovering losses when it shed 16% in 24 hours in February. For the calendar year to date, Bitcoin is 8.19% higher.
Ethereum (CRYPTO: ETH) is enjoying a similar run. As of Wednesday morning Australian time, the crypto's price had risen 0.21% higher for the day to be trading at US$2,608.58 (AU$4,019.17).
Ethereum's price has risen much more strongly over the month, outpacing Bitcoin's gains. Since early May, Ethereum's trading price has shot up 42.28%, recovering some losses from earlier in the year.
Why are prices rising for these cryptos?
According to Finance Magnates, crypto prices are rising again due to a "potent mix of macroeconomic shifts, renewed institutional inflows, and technical momentum".
Bitcoin's price recovery is largely attributed to on-chain data that reveals large holders are buying the dip, a classic bullish signal that often precedes further gains.
The Bitcoin price has become a symbol of resilience in early June 2025. Geopolitical tensions and looming policy deadlines are pushing traders towards Bitcoin as a hedge against uncertainty, driving up its price recovery.
And another driver is an increase in money flowing into Bitcoin exchange-traded funds (ETFs).
Reece Hobson, crypto analyst at eToro Australia, explains that institutional inflows, particularly through US spot bitcoin ETFs, have pumped US$2.8 billion into the market in May alone, with total ETF assets exceeding US$122 billion.
"To put that into perspective, an estimated US$150 to US$225 billion has been invested in gold ETFs since 2003," he said.
Meanwhile, Ethereum is benefiting from similar macro conditions, and an internal restructure at the Ethereum Foundation has created growing excitement over upcoming protocol upgrades.
"The Foundation's renewed focus on protocol development has injected fresh energy into the Ethereum ecosystem, attracting both institutional and retail interest," the Finance Magnates article says.
Why has Ethereum's trading price risen so much?
According to crypto research firm CoinMarketCap, several factors are driving Ethereum's price, including upgrades to the network and institutional adoption.
"Ethereum sentiment leans bullish due to scaling upgrades, whale accumulation, and ETF inflows, though some warn of short-term volatility from thin exchange liquidity," it said.
"Ethereum's trifecta of scaling momentum, supply squeeze dynamics, and DeFi innovation positions it for volatility-sensitive growth."
But it also warns that Ethereum's price hinges on execution of scaling upgrades, ETF developments, and macroeconomic liquidity trends.
"While short-term resistance and neutral sentiment pose risks, institutional inflows and whale accumulation suggest a bullish bias for late 2025."
