Ethereum crashed in Q1. Could May’s Pectra upgrade bring it back?

2025-04-11 17:03:15 Primitive Reading

After suffering a 45% price drop in Q1, Ethereum (ETH) could be gearing-up for a revival. On May 7, the much-anticipated Pectra upgrade should pass its final test run, paving the way for a mainnet go-live.

The network re-tooling is a portmanteau of two improvement packages called Prague and Electra, which encompass 9 Ethereum Improvement Proposals (EIPs) overall. Taken together the changes promise to smooth the onboarding process for new retail traders while making the planet’s number two blockchain more attractive for institutions.

Pectra raises the validator staking limit from 32 ETH to 2,048, reducing the need to run multiple validator nodes. By simplifying staking, Ethereum’s caretakers hope to enable stronger liquidity lockups and even facilitate whale movement.

If user experience (Ux) improves and big investors get an easier go, on-chain activity should shoot up — the thinking goes. Ethereum’s price curve post-Pectra will be a key crypto market metric in Q2. Let’s look at what’s behind it.

What Is the Ethereum Pectra upgrade?

Pectra is an upgrade to the Ethereum blockchain designed to make staking more efficient, improve user experience, build on the network’s previous attempts at rollup-centric scaling, while improving Ethereum’s decentralization.

Before they were united, Prague aimed at making changes to Ethereum’s execution layer, while Electra focused on consensus layer upgrades.

Pectra has been anticipated for many months but we now have an official date for go-live: May 7th 2025. If all goes to plan, it will be the largest update Ethereum has ever seen.

The main proposals behind Pectra

As of March 2025, the Pectra upgrade consisted of nine EIPs:

EIP-2537: New precompile that allows 120+ bits of security for operations vs 80 bits of security in existing BN254 precompile
EIP-2935: Saves historical block hashes to support stateless clients.
EIP-6110: Supply validator deposits on chain
EIP-7002: New mechanism to allow validators to trigger withdrawals and exits from their execution layer withdrawal credentials.
EIP-7251: Increase the max stake limit of Ethereum validators from 32 ETH to 2048 ETH.
EIP-7549: Provides extra data availability for Ethereum layer twos (L2).
EIP-7685: Framework to allow validator smart contracts to undertake certain operations.
EIP-7702: User experience-focused improvements to EOA users.
EIP-7742: Uncouple blob count between consensus layer and execution layer.

EIP-6110, EIP-7002, EIP-7251, EIP-7549, and EIP-7742 will be implemented in Ethereum’s consensus layer.

Disclaimer: This specification is preliminary and is subject to change at any time without notice. Amazon Finance assumes no responsibility for any errors contained herein.