Will Ethereum skyrocket after the upgrade?

Ethereum's Pectra upgrade, boosting scalability and security, may increase its price due to enhanced user experience, improved network safety, and greater developer interest; however, increased staking and macroeconomic factors could offset these positive effects.

Mar 04, 2025 at 02:04 pm

Ethereum has recently ushered in the highly anticipated Pectra upgrade, and many investors are concerned about whether its prices will soar after the upgrade. Let’s first look at the technological innovation of Pectra upgrades. EIP-7702 improves the experience of crypto wallets and account abstraction, which can make users more convenient to operate, attract more people to use Ethereum wallets, increase the frequency of Ethereum usage, and may drive prices from the demand side.

EIP-7251 raises the maximum stake limit for validators from 32 ETH to 2,048 ETH, which is of great benefit to network security and decentralization. Increased security will make investors more at ease holding Ethereum, prompting more funds to flow into the Ethereum market, providing support for price increases.

EIP-7691 Increases the maximum number of blobs to enhance Rollup expansion capabilities, which can improve Ethereum performance and enable efficient operation under high transaction volumes. Performance improvement will attract more projects to be developed based on Ethereum, expand the Ethereum ecosystem, increase the demand for Ethereum, and have potential upward pull on prices.

From the perspective of market supply and demand, upgrades bring functional improvements and attract more developers and users to enter the Ethereum ecosystem. Developers need Ethereum as fuel and incentive to develop new projects, and users also need to hold a certain amount of Ethereum to participate in ecological activities, which will increase the market demand for Ethereum. If the supply remains unchanged or the growth is slow, prices are expected to rise according to the principle of supply and demand.

However, there are also variables in supply. Although the increase in the pledge limit can improve security, a large number of Ethereum has been pledged and the market circulation has decreased. If the market expects that pledged Ethereum will sell in large quantities in the future, it may cause investors to wait and see and curb price increases.

Let’s look at the macroeconomic environment again. If the global economy is unstable and investors seek safe-haven assets, Ethereum, as a crypto asset with certain safe-haven attributes, may attract capital inflows and drive prices to rise. But if the economic situation improves, funds may flow out of the crypto market, affecting Ethereum prices.

Policies and regulations have a significant impact on Ethereum prices. If more countries adopt friendly regulatory policies for cryptocurrencies such as Ethereum and recognize their legitimacy and application value, it will greatly enhance investor confidence, attract more funds to enter, and help prices rise. On the contrary, strict supervision or even ban will cause market panic and lead to price plummeting.

Market sentiment and investor expectations should not be ignored. When the market is generally optimistic about the prospects for Ethereum upgrades, investors buy in large quantities, which will drive prices to rise rapidly. But once the upgrade effect fails to meet expectations, investors' sentiment turns to pessimism and sells Ethereum, the price will fall sharply.

After Ethereum's upgrade, the price trend is affected by the interweaving of multiple complex factors. Although the upgrade brings many benefits, it cannot be simply determined that it will definitely surge after the upgrade. Investors need to consider all factors in a comprehensive way and make investment decisions with caution.

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