The price of any cryptocurrency is impacted collectively not only by how well its tech improves with time but also by prevailing macroeconomic factors, market forces, and the project's adoption numbers. Ethereum has a long history of upgrades, each building upon the previous—the most recent being the Pectra upgrade.
The Ethereum Pectra upgrade includes some of the most significant improvements and optimisations regarding Ethereum’s user experience, scalability, and gas fees. It is also the biggest in terms of EIPs.
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While the upgrade's major impact on the ETH price remains to be seen, it did help it pull back above $2k. However, whether it would help Ethereum reach $10k is a question few can answer with conviction today.
For now, we can discuss the upgrade's larger impact on the network and the reciprocal advancements that might act as price triggers.
What Exactly Is Ethereum’s Pectra Upgrade?
Ethereum EIPs (Ethereum Improvement Proposals) combine two kinds of upgrades–one for the execution layer and another for the consensus layer on the Ethereum blockchain. The execution layer upgrades are named after cities, while the consensus layer upgrades are named after historic cities.
The Pectra upgrade is a part of a well-laid-out roadmap for network improvements. Here’s a quick timeline:
Chronology of Ethereum Updates since 2015
The Pectra upgrade is also a combination of two upgrades: the Prague upgrade at the execution layer and the Electra upgrade at the consensus layer. The name Pectra is an acronym for Prague + Electra fork.
FYI: Each of these upgrades is a hard fork, meaning none of these upgrades are reversible, and users need to update their blockchain software in order to continue participating in the network.
Ethereum Pectra upgrade’s release date in 2025 was scheduled for March. However, the schedule was postponed. The upgrade finally went live on 7 May 2025. It succeeds the Dencun upgrade, which came into force in March last year.
Ethereum Pectra update is the most comprehensive upgrade to date, with a total of 11 EIPs. The significant EIPs among the 11 in the upgrade will bring the following merits:
EIP-7702: Brings account abstraction that would change multi-transaction operations into a single-transaction event. The EIP also brings transaction bundling, asset recovery, and gas sponsorship.
EIP-7251: Increases the MAX_EFFECTIVE_BALANCE from 32 ETH to 2048 ETH per validator. Validator consolidation happens, which takes off the heavy load from the network.
EIP-7691: Brings blog capacity doubling from 3/6 to 6/9, improving scalability for rollups and Layer-2s.
EIP-7623: Increases the cost of using calldata to encourage the use of blobs to post data.
Reduces the need for oracles by allowing the smart contracts to directly communicate with the consensus layer.
EIP-2537: Allows staking pools and Zero-Knowledge proofs (ZK proofs) run faster and use less gas.
Two important EIPs
Two of the eleven EIPs hold greater significance, given their role in improving Ethereum’s user experience and scalability. Let’s dig a bit deeper into the rollouts:
EIP-7251
In 2022, Ethereum shifted from Proof-of-Work to a Proof-of-Stake mechanism to make the network less energy-intensive, faster, and scalable. Investors could now stake ether to contribute towards network security and earn staking rewards. Earlier, the maximum limit on staking was fixed at 32 ETH, allowing for better decentralisation. However, the ETH network had to deal with transaction latency and slower validations as the number of staking ETH holders was huge.
EIP-7251 raised the maximum effective balance for validators from 32 ETH to 2,048 ETH. Validators can now stake large amounts of ether, which reduces the number of validators needed, helping improve the network's efficiency and reducing transaction latency.
Source: Coinmetrics
After the upgrade, 11,150 validators have consolidated so far, bringing the active validator set down by 16,344 validators, and ETH staked per validator increased to ~32.4 ETH. Take a look at the charts below:
Source: Coinmetrics
This EIP is significant as it is a big leap towards making Ethereum scalable and stakers capital efficient. It would also help reduce network overhead and communication load that usually comes with a large validator set.
EIP-7702 is an upgrade for the people, and not ETH devs. It aims to improve the overall user experience by cutting down the steps involved in different on-chain operations.
In the words of Ethereum Foundation, this upgrade gives superpowers to Externally Owned Accounts or EOAs.
Under this upgrade, EOAs can behave as a smart contract, based on which account holders can sign an authorization to activate certain functionalities, including transaction bundling, gas sponsorships, and custom permissioning. The authorizations can be both single chain or multi-chain, and the account holder can also choose the proxy they want to use.
L2 Fees After Pectra
Ethereum’s upgrades continually address network weaknesses and are meant to enhance scalability, security, and performance.
2024’s Dencun upgrade introduced data blobs, which reduced the gas fee on Layer-2s considerably. Since then, Ethereum has seen a large number of L2s set up base camps here, including Base, Arbitrum, Optimism, etc. However, the blob storage capacity remained limited in relation to the L2 requirements.
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EIP-7691 doubled the blob space throughput/ The blob target increased from 3 to 6 (green line in the figure), while the blob limit increased from 6 to 9 (red line). This would allow greater transaction capacity on the mainnet for L2s. The data availability costs also came down.
After the Pectra upgrade, Layer-2s and rollups have been posting increased blobs from an earlier ~21,300 to ~28,000. The average number of blobs per block target is now 6, above the current utilisation rate. The network is ready to take up additional load as demand from Layer-2s increases.
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The Layer-2s have yet to catch up, and blob fees remain extremely low (or negligent) until competition for blobs increases. Average blob fees for rollups have dropped to $0.0001 or 4 gwei. Layer-2s can secure better profit margins and facilitate more transactions on their respective chains, lowering Ethereum's load. Already, Base and Optimism are seeing a spike in transaction throughput from 8M to 14M.
The vision is to make Ethereum the settlement layer for Layer-2s, Layer-3s, and rollups, securing room for infinite scalability and efficiency.
Only ~52K blocks have seen 6 or more blobs, while ~40K blocks contain 0 blobs, meaning these blocks are still using call data for data storage. EIP-7623 makes call data fees more expensive. There’s enough room for growth, and as institutional adoption gathers steam, the additional capacity will be soaked up before we know.
Could it be the last stop before $10K?
The relationship between technology and price is inherently complex.
For Ethereum, especially, all upgrades form part of a bigger vision (currently called the Merge). Ethereum EIPs lay down the blueprint for suggesting and implementing changes in the Ethereum network. These upgrades aren’t positioned to directly impact prices in the short term. However, prices tend to improve organically as the network’s performance and efficiency improve over time.
Even before the upgrade went live, Reddit communities on Ethereum were quick to respond to the price prediction as ridiculous, citing a 50% downfall in prices after the previous upgrade. After the upgrade, the market reaction hasn’t been anywhere near overwhelming.
However, on the plus side, institutions like JP Morgan are setting up their funds on Ethereum. BlackRock and the US Government both have their funds and short-term treasuries on Ethereum. The network upgrades will help better position Ethereum as the institution’s favourite for blockchain infrastructure.
Ethereum ETF inflows have seen a decent uptick, and network activity is improving. Despite gas fee reduction, Ethereum dApps have generated $326 billion.
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Ethereum is playing a long-term game, and ETH holders clearly understand this. Long-term ETH holder addresses now control 22.8 million ETH.
Source: Cryptoquant
Institutional adoption is also at an all-time high. X user Leon Waidmann posted that ETH whales have accumulated nearly 1M ETH in investments.
Source: Glassnode
The popular newsletter MilkRoad covered how Ethereum will be a preferred corporate treasury asset over BTC in the long run, and the signs are already there. Ethereum is more productive than Bitcoin, and corporations can earn yields just by staking Ethereum rather than taking on massive debts to buy BTC.
However, risks remain, such as centralisation at the client diversity level, governance issues, and regulatory roadblocks.
What comes after Pectra?
The combined impact of the Ethereum Pectra upgrade would be improved user experience and better retail and institutional adoption, which ultimately would be a positive factor in price.
The impact of the Ethereum Pectra Upgrade won’t be a standalone phenomenon, but part of a bigger shift is taking place in the crypto sector. We might see Bitcoin getting replaced as a reserve asset in the near future, or, conversely, Ethereum might witness more difficult days dealing with its infrastructural issues. Chains like Solana, Tron, etc., are turning out to be better alternatives to the complex setup that Ethereum serves for developers and builders, and users would rather spend directly on the mainnet than keep spending gas fees on bridging tokens even within the ETH ecosystem.
Vitalik Buterin shared plans to simplify and expand Ethereum 10x over the coming years. There have been ample discussions and summits, but the $10k per ETH reality would take years and depend on how Ethereum balances blockchain ethos and real-world utility.
FAQ
Which stocks might benefit from the Pectra upgrade in Ethereum?
While the Pectra upgrade won’t directly impact stock prices, companies that deal in Ethereum tooling, infrastructure, and Layer-2 solutions might benefit from the upgrade and its subsequent impact. Ethereum-related stocks may include Coinbase, Bit Digital, Exodus Movement, etc. You can find the entire list of such stocks on Coingecko.
How will the Pectra upgrade challenges impact the Ethereum ecosystem?
Challenges surrounding the upgrade that remain before Ethereum include complexities in implementation, compatibility with existing EIPs, and the steep learning curve for developers. The account abstraction upgrade is still in its experimentation stage, and is not applicable to all kinds of accounts. Most of the EIPs are part of bigger upgrades. Ethereum remains a work in progress.
When was the Ethereum Pectra upgrade?
The Ethereum Pectra upgrade went live on May 7, 2025.
Will the Pectra upgrade help ETH prices?
The Pectra upgrade did not have a major impact on Ethereum prices. However, in the long term, it will contribute to improving network performance and adoption.
