Ethereum’s Pectra Upgrade: Boosting Ether’s Performance

After a rapidly declining graph since December, Ether (ETH) has suddenly surprised investors and is gaining a lot of traction in May. This happened after the Ethereum Pectra Upgrade launch, which experts believe would transform Ethereum’s scalability, long-term value, and improve user experience. The launch has already taken Ether (ETH) from $1,800 to nearly $2,550!

Ether (ETH) is trading for $2,547.63 at the time of writing. Just before the Ethereum Pectra Upgrade, Ether had a negative phase, and it fell a lot from December to April. In December 2024, Ether had an impressive price of $4,000, but then it started to fall and went down to $1,472 in April 2025. In late April, Ether started to improve, but could still not do better than $1,700-$1,800.

The big break came on May 7, when Ethereum announced the long-awaited upgrade, and Ether’s price shot up to $2,500 within four days. This month, Ether (ETH) has grown by 45.74%, giving way better returns than Bitcoin’s 17.22%. Over the week, the token’s trading volume has reached $ 251.88B. However, Ether (ETH) still has a long way to go to reach its all-time high of $4,891.70.

In the Ethereum Pectra upgrade, there are two planned upgrades for its two layers, and there are 11 Ethereum Improvement Proposals (EIPs) for the Ethereum ecosystem.

The most impactful change is EIP-7691, which makes the blobs’ capacity double compared to earlier. These blobs are temporary data packets used by Layer 2 rollups, and when you increase their capacity, it will reduce the data fees and even improve the scaling of Ethereum. All in all, this makes Ethereum faster and cheaper to use, knocking out one of Ethereum’s biggest criticisms about high gas fees.

EIP-7702 is another notable addition, which introduces a form of account abstraction, which means externally owned accounts (EOAs), wallets that are controlled with a private key, will act more like smart contracts. Proposed by co-founder Vitalik Buterin, this update will allow users to batch transactions, delegate gas payments, and use more advanced security features. This is especially exciting for developers and institutions as this simplifies the onboarding process and interaction with dApps.

The Ethereum Pectra upgrade also targets Ethereum’s staking ecosystem and has increased the max effective balance for validators from 32 ETH to 2,048 ETH. According to CoinDesk, this change will allow institutions and large stakers to engage with the platform more efficiently, potentially increasing the total ETH locked in staking and improving security on the Ethereum network.

After the launch, the open interest in Ether derivatives increased more than 21% in a day and reached $25.8 billion. Apart from this, even the traders were being bullish as funding rates became positive on all exchanges for ETH contracts. This shows that the market was optimistic because when there are positive funding rates, it means that long-position holders are paying a premium to short sellers.

While Ethereum's Pectra upgrade gave a good momentum to Ethereum, analysts are also warning that this is not enough for long-term growth. There are other factors like improving risk appetite and trading environment that are also important for growth. But there’s also good news because Binance has predicted that Ether can reach $2,682.77 in 2026.

The Ethereum Pectra upgrade is a great improvement as now there will be better efficiency, accessibility, and staking rewards. While the market has responded positively so far, ultimately, the success will depend on how much consistent traction Ethereum gets in the months ahead.