On Thursday evening (Eastern Time), Ethereum (ETH) surged 20% to over $2,200, marking its largest single-day increase since May 2021 after the long-awaited Pectra update was successfully activated.
After the Pectra update, Ethereum soared 20%, creating the largest single-day increase since 2021.
This growth is catalyzed by technological and macroeconomic developments, alongside the rekindling of investor optimism and the "risk-taking" atmosphere in the cryptocurrency market.
Min Jung, a research analyst at Presto Research, stated: "After lagging behind BTC for most of the year, ETH is finally catching up."
"The recent Pectra upgrade helps restore some confidence, and given that ETH/BTC has dropped nearly 40% to $0.02 since the beginning of the year, it is not surprising that buyers have stepped in at this level."
Pectra: The most important upgrade for Ethereum since the merger.
Pectra was launched on Tuesday, representing the most significant technological advancement for Ethereum since the 2022 merger, transforming the network to proof-of-stake.
Pectra has improved staking efficiency, validator management, and Layer 2 scalability. Analysts believe these improvements can reduce congestion and enhance network availability. This is particularly important as Ethereum competes with faster blockchains in the DeFi and NFT sectors.
"In addition to positive macroeconomic news, traders believe that the cryptocurrency industry has finally entered a recovery phase, becoming a tool to hedge against market uncertainty. With altcoins experiencing buying pressure against the backdrop of rising risk appetite and breaking downtrends, investors are changing their views on cryptocurrencies," said Nick Ruck, head of LVRG Research.
Analysts attribute some market momentum to the resumption of US-China trade talks, with US Treasury Secretary Scott Bansen expected to meet with Chinese officials in Switzerland. This negotiation has led to an increase in global market risk appetite, including stocks and cryptocurrencies.
Ethereum's recovery may become a turning point after months of underperformance compared to Bitcoin. With the emergence of Pectra and the shift in favorable macroeconomic factors, Ethereum's technological foundation is strengthening, and traders are closely watching whether this signals a broader recovery for altcoins.