On May 7, 2025, the Ethereum mainnet completed the Pectra upgrade, which is the most significant network update since the merge in 2022. It has brought numerous technological innovations to Ethereum and also led to a sharp increase in its price. Long investors have even set their targets at $10,000.
Pectra Upgrade Content and Technical advantages
This upgrade integrates 11 Ethereum Improvement Proposals (EIPs). Ip-7251 increases the maximum staking balance of validators from 32 ETH to 2048 ETH, reduces the total number of validators, lowers the network load, and improves management efficiency. Ip-7691 increased the number of target BLOBs per block from 3 to 6, and the maximum from 6 to 9. The Blob fee dropped to the lowest level in history, and the L2 transaction cost decreased significantly, attracting more DeFi and NFT projects. The EIP-7702 realizes account abstraction, enabling Externally Owned Accounts (EOA) to temporarily transform into smart contracts. It supports batch transactions, Gas sponsorship, and also allows the payment of Gas fees using stablecoins, greatly simplifying user operations. The EIP-7002 shortened the activation time of the validator withdrawal process from 9 hours to 13 minutes, and the EIP-7549 reshaped the Gas fee structure, making the transaction fees during peak hours more stable. These improvements have comprehensively enhanced the scalability, security and user experience of Ethereum.
The upgrade drives up the price
After the upgrade was completed, the price of Ethereum rose rapidly, successfully breaking through $2,200 and reaching $2,600 in some periods, with an increase of over 40% within 72 hours. From the perspective of internal causes, the upgrade stimulates on-chain activities, the trading volume of the mainnet surges, the ETH destruction rate sosters, and IP-7251 reduces the number of validators, suppressing the generation of new ETH, presenting a deflationary state for Ethereum. Deflationary expectations drive up the price. From a market perspective, technological benefits attract more on-chain activities, and crypto enthusiasts are full of expectations for the improvements brought by the upgrade. Although the futures premium rose slightly, it was still below the neutral threshold. However, it has shown that leveraged long positions have tentatively increased their positions, and market optimism has pushed up trading volume. Bitcoin has broken through $100,000, driving the recovery of the crypto market and creating a favorable atmosphere for the price increase of Ethereum.
The feasibility of a long target of $10,000
The bulls’ setting of the target at $10,000 is not without basis. In the long run, after the Pectra upgrade, Ethereum is expected to attract more developers and users, further promoting the development of the DeFi and NFT fields, enhancing its position in the blockchain ecosystem, and increasing the intrinsic value of Ethereum. The current market sentiment is positive, investors’ confidence in Ethereum is growing, and funds are continuously flowing in. Some analysis platforms have also raised their Ethereum price prediction models. If the current upward trend continues, the price of Ethereum has the potential to reach $3,000 by the third quarter of 2025. If it can maintain a good development trend in the future, there is also a possibility of moving towards $10,000.
The challenges faced by rising prices
Ethereum still faces many challenges to reach the goal of $10,000. Firstly, the “parasitic” predicament of L2 is prominent. L2 chains like Base, which have 10.3 million monthly active users, retain most of their revenue within their own ecosystem. The ability of the mainnet to capture fees has declined. Ethereum’s deflation relies more on L2 activities rather than its own direct demands. Moreover, the effective integration between L2 and the mainnet is currently insufficient. Secondly, the competition pressure is huge. Solana has attracted 82.2 million monthly active addresses with its high throughput and low fees, and has developed rapidly in the DEX and AI-related fields, with the SOL/ETH exchange rate reaching a new high. The progress of Tron in the stablecoin market and Hyperliquid in perpetual contract trading has also diverted traffic from Ethereum. In contrast, the fragmentation of Ethereum’s L2 has led to the problem of “replication” in innovation.
Furthermore, the EIP-7251 raised the staking threshold, attracting institutions while deactivating retail investors, raising concerns about centralized risks, possibly facing regulatory reviews, weakening community trust, and this situation also affected the advancement of Ethereum ETFs, causing investors to miss out on some annualized yields. Finally, Ethereum lacks a clear and unique narrative. In the face of Bitcoin as the “digital gold” and Solana as the “Nasdaq on the chain”, its core advantage, DeFi, has been diluted due to the fragmentation of L2. The transformation of other public chains and hot trends are still seizing the initiative of its narrative. The execution speed and communication transparency of the Ethereum Foundation also need to be improved.
Ethereum’s price has soared due to the Pectra upgrade. Although the bull target of $10,000 has some rationality and possibility, it faces numerous challenges and the future price trend is full of uncertainties. Investors need to closely monitor market dynamics and the development of Ethereum.
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