Ethereum's ether ETH$3,369.33 surged on Tuesday to its strongest price since mid-November, leading crypto markets higher as bitcoin BTC$93,936.05 climbed above $94,000.

The second-largest cryptocurrency climbed to just shy of $3,400, rallying 8.4% over the past 24 hours. Those gains significantly outpaced bitcoin’s 4.5% advance and the broad-market benchmark CoinDesk 20 Index’s 6% climb.

The rally also drove the ETH/BTC ratio — a closely-watched gauge of ether’s relative performance to bitcoin — to its strongest level since late October, signaling rotation into ETH from the leading crypto.

Ether's rally and relative strengths against BTC is being driven by "improving regulatory expectations and renewed optimism around ETF-related inflows" with staking being added to funds on the horizon, Joel Kruger, market strategist at LMAX, said in a Tuesday note.

Asset management giant BlackRock, issuer of the most popular spot ETH ETF, filed Monday to introduce the iShares Ethereum Staking Trust, which would provide yield from staking to investors.

"The development revives optimism around ETH-focused inflows and the prospect of yield-bearing crypto products reaching a broader investor base," Kruger wrote. "While regulatory timelines remain uncertain, the headline has added more support to ETH’s relative stability versus bitcoin."

ETH could also benefit from regulatory efforts to pave way for real-world asset tokenization, a fast-growing sector focusing on bringing financial instruments like bonds, funds and real estate onto smart contract platforms like Ethereum.

Paul Atkins, chairman of the U.S. Securities and Exchange Commission, has touted tokenization a key innovation for capital markets, saying in an interview with Fox Business last week that it has the potential to change the financial system, reducing settlement risks and trade gaps.