Ethereum’s Pectra upgrade launched on May 7, 2025, introducing eleven EIPs aimed at improving scalability and staking efficiency. Despite significant changes, ETH remains under $1,900, with a tepid market reaction. The upcoming Fusaka upgrade could present more advancements, but Ethereum must show real-world benefits to compete effectively in the blockchain space.
Ethereum’s latest Pectra upgrade went live on May 7, 2025, but despite the hype, the price of ETH remains firmly below the $1,900 mark. Even with significant technical changes, the market response was less enthusiastic than some may have hoped. The Pectra upgrade includes eleven Ethereum Improvement Proposals (EIPs) focusing on improving scalability, user experience, and staking efficiency.
Among the standout features is EIP-7702, which introduces account abstraction. This allows users to combine transactions into one, pay gas fees in different currencies, and implement social recovery options. Jeremy Allaire, CEO of Circle, noted the significance of this upgrade, comparing it to the rollout of SSL/TLS in early web browsers. Another notable proposal, EIP-7251, raises the maximum staking limit from 32 ETH to 2,048 ETH per validator, aiming to simplify participation for institutions.
On the matter of Layer-2 scalability, EIP-7691 supports Layer-2 solutions by enhancing the capacity for compressed transactions to Ethereum’s main network, which has led to the lowest blob fees recorded, as per Alchemy’s Head of Engineering, Noam Hurwitz. Nevertheless, ETH’s price has remained stagnant amid these advancements, and bearish sentiment is evident. The futures premium hovered at just above 3%, hinting at diminished interest from leveraged traders.
Ethereum still faces strong competition from other blockchain networks, like Solana, which has attracted 82.2 million monthly active users. In contrast, Ethereum’s Layer-2 solution, Base, counts 10.3 million. While Ethereum leads in total value locked at $53.7 billion, its network fees have recently seen sharp declines compared to other platforms like Tron and Solana, raising questions about its sustainability in a crowded market.
To break the ceiling and reach the $2,200 mark again, there needs to be tangible benefits demonstrated from these upgrades. Investors are searching for solid incentives to boost DApp usage, demand for ETH, or at the very least, better staking returns. Macroeconomic factors also loom large; recession fears and uncertainty from trade policies add to the headwinds facing Ethereum, which underperformed compared to the overall crypto market by 28% in Q1 2025.
As the dust settles from the Pectra upgrade, all eyes now turn to the next planned update, Fusaka, due later in 2025. This update’s objective is to enhance decentralisation by leveraging network computer processing for blob data, tackling the long-standing scalability issue. For Ethereum to regain its former glory and touch its peak price of $4,800 from 2021, the realities of its technical improvements will need to equate to significant real-world results within a fiercely competitive crypto landscape.
