According to a new research note from JPMorgan, the latest upgrade to the Ethereum network, dubbed Pectra, has improved technical efficiency and attracted greater institutional interest, but activity on the chain remains slow.
This upgrade, which was introduced earlier this month, introduced several Ethereum Improvement Proposals (EIPs) targeting improvements to staking performance, reward mechanisms, and transaction processing.
These changes were designed to make Ethereum more attractive to institutional stakeholders.
JPMorgan analysts, led by Nikolaos Panigirtzoglou, stated that while these developments represent a strategic advance, they have not yet resulted in a significant increase in daily Ethereum transactions or user engagement on the network, according to The Block.
Ethereum's affinity for institutional finance is also reflected in its adoption of token standards such as ERC-3643 and ERC-1400.
These standards help digital assets comply with compliance requirements, such as Know Your Customer (KYC) and Anti-Money Laundering (AML) checks, making Ethereum more compatible with regulated financial systems, including integration with infrastructure giants like the Dubai Multi Commodities Centre (DTCC).
Analysts have compared Ethereum's development to that of Bitcoin, noting a similar pattern of increased institutional involvement.
Ethereum futures markets on the Chicago Mercantile Exchange (CME) are showing growing interest from institutions, although the relative lack of inflows into spot Ethereum ETFs, especially compared to Bitcoin ETFs, highlights weak demand from retail investors.
Although the total value tied up in Ethereum contracts has increased, growth in dollar-denominated currencies has lagged, raising questions about the network's broader utility in the current market.
At the same time, Ethereum fees have been declining, partly due to the adoption of layer-2 scaling solutions, and the expansion of the Ethereum supply since the Dencun upgrade, which has raised concerns about inflation as usage growth slows.
