The recent strong rise of Ethereum: Is it driven by the Pectra upgrade or a rebound from the bottom?
The Pectra upgrade is more like the "finishing touches" of the Cancun upgrade, mainly involving some underlying optimizations and detail improvements, rather than groundbreaking technological innovations.Author: Haotian
The recent significant rise in Ethereum $ETH has led many to question whether it is related to the recent Pectra upgrade. The answer may not be so.
The Pectra upgrade is more like the "finishing touches" of the Cancun upgrade, mainly involving some underlying optimizations and refinements rather than groundbreaking technological innovations.
From a technical perspective, the four EIPs included in the Pectra upgrade all point in the same direction: making Ethereum run more stably and efficiently. EIP-7044's state expiration standardization, EIP-7524's redefinition of fuel limits, EIP-7697's transaction pipeline optimization, and EIP-6789's difficulty adjustment improvements—these are all typical "patch-up" upgrades that address some marginal issues left by the Cancun upgrade.
The logic that truly determines the price movement of Ethereum is actually the "value recovery" after being excessively FUDed.
In the past few months, Ethereum has indeed faced a wave of concentrated scrutiny: the dispersion of layer2 liquidity has been exaggerated into an ecological split, comparisons with Solana's performance have been interpreted as a failure of the technical route, and the expansion of various layer2 ecological applications has fallen short of expectations, with narratives around Restaking, modularity, zk, etc., failing to capture value.
When all the focus was on Ethereum's issues, people overlooked some key facts: the total locked value in DeFi remains stable at $119B, the Cancun upgrade has significantly reduced layer2 costs, ETF inflows continue to strengthen, and new narratives like RWA and PayFi are primarily developing within the Ethereum ecosystem.
The fundamentals of Ethereum are not as bad as market sentiment reflects.
Institutional investors have clearly seen through this emotional imbalance. A typical example is Abraxas Capital's massive purchase of 242,652 ETH (approximately $561 million). Moreover, during the period from May 9 to 14, large ETH transfers (>$1M) also significantly increased, and the ETH balances of institutional wallets have noticeably grown, indicating planned large-scale accumulation by institutions.
So, if we must find a logic for this round of Ethereum's rise: Ethereum has been overly FUDed, and there is a need to rediscover its existing value, while institutions have seized the opportunity to buy the dip?
