Ethereum (ETH) consolidated near $3,400 on Tuesday and is poised to end the year with a return of around 50%. Ethereum has posted disappointing gains compared to Bitcoin and most altcoins rank among the top 20 tokens by market capitalization
The narrative could change in 2025 through catalysts such as the upcoming Ethereum upgrade, accumulation by institutional investors, and other market movers.
Ethereum is preparing for a Pectra upgrade in 2025
Ethereum could see an increase in scalability, security and user experience with the upcoming Pectra upgrade, which is expected to go live in 2025. The upgrade will introduce improvements to account abstraction, validation operations, and network performance.
The goal is to improve both the user and developer experience on Ethereum and make it easier to implement future scalability upgrades.
Validator staking limits, stake withdrawals, and streamlined smart contract development could improve Ethereum’s network security and efficiency. This could have a domino effect on Layer 2 chains that rely on Ethereum for their security infrastructure.
Pectra will be the third most significant upgrade in the Ethereum ecosystem after the merger, and its successful execution could act as a catalyst for Ether’s recovery in 2025.
Ethereum analyst Anthony Sassano estimates that the Pectra upgrade will go live next March or April. In particular, Unichain, an Ethereum-based protocol whose mainnet is scheduled to launch in early 2025, is targeting the use of blobs, and Pectra’s improvements could help Ethereum meet Unichain’s scalability requirements.
