In May 2025, Ethereum is preparing to launch the much-anticipated Pectra update, a significant milestone for the network. The upgrade, which combines improvements from two previous updates, Prague and Electra, promises to transform Ethereum into a more scalable, efficient, and secure network.
This raises the question: will the price of Ethereum (ETH) finally see a significant recovery after the launch? Let's understand what this update could mean for the future of ETH.
What Is the Pectra Update?
Ethereum, one of the largest smart contract platforms in the world, has been facing challenges over the past few years, especially regarding scalability and user experience. The current Pectra update aims to address these issues with the implementation of innovative technologies.
Among the main highlights of Pectra are:
Sharding: This technology will allow the network to be divided into several smaller parts, called shards, which will enable the parallel execution of transactions. Sharding will reduce network overhead and increase transaction processing capacity, one of Ethereum's biggest current bottlenecks.
Layer-2 Solutions (Rollups): Ethereum will also integrate Layer-2 scalability solutions, such as rollups, which will process transactions outside the main layer of the network while still ensuring its security. This could reduce congestion and make the network faster and cheaper.
Improvements in Proof of Stake (PoS): The Proof of Stake consensus protocol, which has already been implemented with the The Merge update, will be further enhanced with the addition of cryptographic improvements to increase network security.
These changes aim not only to improve Ethereum's performance but also the user experience, which could be a crucial factor for the mass adoption of the network.
How the Update Could Impact the Price of ETH?
Despite a recovery in the cryptocurrency market in 2025, ETH has faced difficulties in reaching new highs. In May 2025, the coin was trading at around $1,800, well below its peak of over $4,000 at the end of 2024 or the ATH in 2021, when it reached around $4,700.
Looking to the future, analysts believe that the launch of Pectra could be the catalyst for a possible recovery in the price of ETH.
The impact of the update can be observed in two ways:
Increase in Demand: With its enhanced user experience and scalability solutions, Ethereum could attract more developers and users, boosting the transaction volume. With more transactions being conducted on the network, the demand for ETH may increase, which tends to push the price up.
Reduction in Supply: The Pectra update may also increase the number of ETH locked in the network for staking. With more ETH being staked, the circulating supply of the coin will be reduced, which may further increase the upward pressure on valuation due to the decreased supply in the market.
What Are Experts Saying?
Despite the optimism surrounding Pectra, not all analysts believe that the update will be sufficient to provoke an immediate rise in the price of ETH. Some experts argue that while the update is beneficial for the network's efficiency, it alone should not significantly boost the price in the short term.
On the other hand, other scholars suggest that Pectra could indeed be the trigger for a recovery, especially if the market reacts positively to other economic variables, such as the weakening of macroeconomic pressures.
How Does Pectra Compare to Other Updates?
It is worth noting that other significant updates of Ethereum, such as Merge and Shapella, generated price spikes in the short term, but the lasting impact was not as strong as many investors expected. The difference now is that the market is entering a new, more mature cycle, where large rallies tend to occur after the launch of important updates.
If Pectra can deliver everything it promises, it could be the turning point that many are hoping for.
The Future of Ethereum Post-Pectra
If Pectra is successful, Ethereum may finally regain its prominence, especially at a time when other platforms like Solana and Binance Coin (BNB) have shown superior performance. Moreover, the implementation of improvements that facilitate the use of Ethereum for developers and users could open doors to new innovations, such as more efficient smart contracts and the popularization of DApps.
Another important factor is that, in a scenario of greater adoption, Ethereum could begin to compete more aggressively with other blockchains that offer faster and cheaper transactions, such as Solana. The enhancement of Layer-2 solutions may also allow Ethereum to be more flexible and efficient in supporting an even greater number of transactions and use cases.
Ethereum Towards the Future: Will Pectra Mark the Beginning of a New Era?
The Ethereum Pectra update represents an important step towards improving scalability and user experience, areas where Ethereum has faced difficulties recently. Although the impact on the price of ETH remains uncertain, the upgrade promises to improve both the demand and supply of the asset, which could positively influence its price in the future.
If Ethereum can deliver the promised improvements, it is possible that ETH will recover its market value and re-establish itself as one of the leading cryptocurrencies. However, investors should be attentive to the behavior of the market as a whole, since external factors, such as macroeconomic conditions, can also affect the price of Ethereum after the update is launched.
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