Ethereum Pectra upgrade goes live next week — Will ETH price rally?
Since 2024, Ethereum (ETH) has struggled, trading at $1,813, down 56% from its December 2024 peak and failing to reclaim its all-time high of $4,870. The upcoming Pectra upgrade on May 7 aims to enhance scalability, user experience, and staking efficiency through 11 Ethereum Improvement Proposals (EIPs). Notable features include EIP-7702, allowing user wallets to act like smart contracts, enabling fee sponsorship and gas payments in various tokens. This could improve user onboarding in sectors like gaming and payments without diminishing ETH's role in the network. Pectra also introduces significant changes for validators, allowing them to stake up to 2,048 ETH and simplifying onboarding processes. These upgrades may attract institutional validators and increase ETH's locked supply, potentially raising prices. Currently, Ethereum's burn rate is low at around 70 ETH per day. If Pectra successfully enhances user experience and transaction throughput, it could lead to higher burn rates and upward price pressure. Historical trends suggest that Ethereum upgrades can coincide with price spikes, and Pectra may align with a broader market rally.
