Ethereum Pectra Update Coming in April with Price and Staking Impact

• Ethereum prepares for Pectra upgrade in April 2025.
• Major improvements include changes to validators and wallets.
• Expectation of increased ETH burning and impact on price.

Ethereum is about to undergo one of its biggest upgrades, Pectra, which is expected to launch on the mainnet in April 2025. Before that, two crucial tests will be held: the first on February 26th on the Holesky testnet and the second on March 5th on the Sepolia testnet. If everything goes as expected, developers will meet on March 6th to set a final implementation date. Market anticipation is high, with many investors eyeing the impact this upgrade could have on the price of ETH and the competitiveness of the Ethereum blockchain.

At the time of publication, the price of Ethereum was quoted at $2.701,09 with a drop of 0.5% in the last 24 hours.

Pectra joins two previous updates, Prague and Electra, bringing eight proposed improvements that should transform the experience for users and validators. Among the most anticipated changes is EIP-7702, which will allow externally owned accounts to function more like smart contracts. This advancement is part of the account abstraction strategy, which aims to make wallets more accessible and flexible, for example, allowing users to pay transaction fees with different assets besides ETH.

Pectra is going live 🥳

Holesky will fork at slot 3710976 (Mon, Feb 24 at 21:55:12 UTC)
Sepolia will fork at slot 7118848 (Wed, Mar 5 at 07:29:36 UTC)

Assuming Sepolia goes smoothly, we'll pick the mainnet slot on the March 6 ACD call 📅

— timbeiko.eth (@TimBeiko) February 6, 2025

Another highlight of the update is EIP-7251, which increases the staking limit for validators from the current 32 ETH to 2.048 ETH. This new model should reduce network overhead and allow large validators to consolidate their operations without having to manage multiple nodes. This change is seen as essential for the scalability of the network and to avoid long queues in the staking process.

As Ethereum prepares for these improvements, the crypto market continues to monitor the performance of ETH, which has struggled to surpass the $3.000 mark. In recent months, the second-largest cryptocurrency by market cap has faced challenges such as growing competition, especially from networks like Solana and Sui, as well as uncertainties related to the governance of the Ethereum Foundation. The recent transition in the foundation's leadership has also sparked discussions about the future of blockchain and its ability to remain competitive in the face of emerging networks that offer faster and cheaper solutions.

Next week is going to be a massive week for $ ETH .

If this closes in such a wick and next week ETH goes back above 0.03, the bullish divergence is valid. pic.twitter.com/8ZztXCPYhy

- Michaël van de Poppe (@CryptoMichNL) February 7, 2025

Another important factor is Pectra’s impact on Ethereum’s monetary policy. Since the implementation of the London upgrade, the network has introduced a fee burning mechanism, gradually reducing the supply of ETH. However, the Dencun upgrade in March 2024 reduced transaction fees on layer-XNUMX networks, which also reduced token burning and resulted in an increase in the supply of ETH. Pectra could reverse this trend by doubling the available data space, once again boosting the ETH burn rate as demand for data storage grows.

My bat signal 🦇🔊 will return when ETH is ultra sound again, soon enough™.

ETH supply currently grows 0.5%/year. That's 1%/year of issuance minus 0.5%/year of burn. To become ultra sound again, either issuance has to decrease or the burn has to increase. I believe both will… pic.twitter.com/5TsAowD2jA

— Justin.eth Drake (@drakefjustin) February 5, 2025

The market’s reaction to these changes is still uncertain, but some analysts believe that the update could be a catalyst for a new price rally. While some estimate that ETH could reach $4.100 after the implementation, there are even more optimistic predictions that project a new record above $6.000. Despite the market volatility, the growth of institutional interest in Ethereum has been a positive factor. Recently, ETH-based ETFs have seen significant capital inflows, indicating an increase in institutional investor appetite. Major players such as BlackRock and Fidelity continue to accumulate ETH, reinforcing the thesis that the cryptocurrency remains a long-term bet.

With Pectra on the horizon, Ethereum may be on the verge of regaining its deflationary strength and solidifying its position in the market. If the changes bring the expected efficiency and scalability, the network could become the leading smart contract platform, avoiding the risk of losing ground to competitors.