Ethereum (ETH) Price Surges by 7.3% Following the Pectra Upgrade

Ethereum (ETH) has rallied sharply in the hours following the launch of its Pectra upgrade, marking the cryptocurrency's strongest single-day gain in months.

The Pectra upgrade, which launched on Monday, saw a maximum stake limit increase to 2,048 ETH per validator.

It also brings eleven targeted Ethereum Improvement Proposals to improve network stability, scalability and developer flexibility in smart contracts.

Pectra is the second-largest upgrade after the Merge, according to Tim Beiko, who chairs core protocol meetings. It will also drastically alter staking economics and validator efficiency.

One of the standout features of Pectra is account abstraction, which allows users to pay transaction fees with tokens other than ETH.

However, Threat Researcher Vladimir S. cautioned users to be aware of scams and use wallets with advanced protections when interacting with account abstraction.

Those who prefer telegram messages should double check the source and beware of phishing attempts. Otherwise, they may get locked into a malicious contract.

The crypto development team will be monitoring for 24 hours to quickly identify and resolve any issues.

After Dencun brought Layer-2 cost reductions, Pectra continues the role in tackling both infrastructural and user-facing challenges.

As validators begin configuring automatic reward compounding under the new limit, smaller stakeholders can benefit from the seamless yield optimisation previously accessible only to larger operations.

The streamlined staking architecture under Pectra could facilitate a more decentralized distribution of validating power.

This could help mitigate concentration risks that have been a subject of concern among community members.

According to data from CoinGlass, Ethereum has posted an average May return of nearly 28% since 2016.

This optimism comes as the world's second-largest cryptocurrency seeks to close out a five-month underperformance streak against Bitcoin.

According to CryptoQuant's valuation metrics, ETH appears extremely undervalued compared to BTC, which could propel a strong move if demand emerges.

ETH is now extremely undervalued compared to BTC, the first time since 2019.

Historically, this led to Ethereum outperforming.

However, supply pressure, weak demand, and flat activity could stall a rebound. pic.twitter.com/QqU2Xh3vo9

— CryptoQuant.com (@cryptoquant_com) May 8, 2025

In the hours following the Pectra rollout, Ethereum surged by 7.3%. It reached $1,966.11 and pushed its market cap above $237 billion amid stellar trading volumes above $58 billion.

With Bitcoin dominance hovering near 63.9%, altcoin investors are viewing the upgrade as a rare catalyst that could shift momentum back toward Ethereum and other Layer-1 networks.

"This Pectra upgrade is a huge opportunity to flip the script in favour of altcoins. Especially in the case of Ethereum, which has seen some sluggish price action in recent months," said Tracy Jin, COO of MEXC.

Despite the near-term upside, some analysts caution that flat on-chain activity and sustained supply pressure could hamper any sustained rally unless demand emerges in the coming weeks.