Ethereum’s Pectra ‘hard fork’ is expected to introduce key updates to improve Ethereum user and developer experiences. The update, which will be rolled out in two phases, is scheduled for release during the first quarter of 2025.
Kraken discussed Pectra’s impact on ETH holders, pointing out that it will enhance Ethereum’s scalability, UX (user experience), and security. With the Pectra split update, Ethereum will cater to a wide range of use cases and user needs, enabling Layer 2 solutions (L2s) to be more affordable and validators more flexible to manage. The preceding March 2024 Dencun update release introduced proto-danksharding to increase transaction speeds on the network.
Derive’s Dawson projected that Ether could gain over 257% to hit $12K by the end of 2025 if Ethereum successfully implements the Pectra update. He added that a regulatory-friendly environment under Trump’s incoming administration could further support Ethereum’s growth. Dawson also believes that the growth of layer 2 solutions and enhanced interoperability could drive huge gains, especially for ETH holders. He, however, cautioned that Ether’s price could fall below $2K in a bearish case where spot ETH ETFs failed to attract institutional interest.
Pectra is likely to make new Ether millionaires this year
⚙️ Phase 1 of Pectra is about to arrive!
This update will include 19 fundamental EIPs and introduce key innovations like sponsored transactions, allowing others to cover fees for you. Additionally, it will enhance @ethereum’s scalability, efficiency, and usability 🙌
Check out…
— Stakely (@Stakely_io) January 8, 2025
The Pectra update will bring huge changes, such as enhancing account abstraction, validator operations, and network performance. Pectra aims to improve experiences for Ethereum users and developers and set the stage for future scalability upgrades. The update is set to introduce 20 EIPs (Ethereum Improvement Proposals) that will address specific features and functionalities to streamline implementation.
Pectra will be rolled out in two phases. The first phase (PectrA), comprising eight EIPs, is expected to be released during Q1 of 2025, while phase two (PectrB) will be available in 2026. Many elements in Pectra generate drawbacks at the code level, which could impact the network’s reliability, user trust, and ETH prices.
The main feature of PectrA will allow users to find sponsors to cover their transaction costs, facilitating access to the network for those with low balances. EIP-7702 will eliminate the need to hold small ETH amounts to execute blockchain transactions. EIP-7251, on the other hand, will allow ETH stakers with 32 ETH or above to earn staking rewards.
“This will make staking cheaper, leading more people to stake and thus decreasing staking rewards over time. For that reason, we’re extremely bullish about restaking. A lot of people will want to boost their staking rewards by also securing other networks.”
-Gaia Regis, co-founder and CEO of Byzantine
Key updates, such as increased validator stake limits and flexible staking withdrawals, will enhance network security and efficiency. Streamlined smart contract deployment will also be a crucial aspect of the Pectra update.
Trump’s pro-crypto policies will be especially beneficial for ETH holders
Saul Rejwan, managing partner at Masterkey, said that Ethereum and other major crypto sectors like DeFi and DePIN stood to benefit more from Trump’s presidency and a crypto-friendly U.S. SEC. He added that DeFi projects on Ethereum will thrive under Trump’s more favorable regulatory framework. Sectors like restaking needed a little regulatory push to attract institutional investors. Rejwan said he expected the new administration to lower barriers to entry and make it easier for early-stage crypto investors and resilient firms to innovate and thrive.
Matt Houghan, chief investment officer at Bitwise, also expects Ethereum to boom in 2025 since the asset had three core things going for it. He pointed out that Ethereum sat at the center of the three biggest trends shaping crypto in 2025, including the rise of tokenization, stablecoins, and AI agents. Houghan asserted that Ethereum had dominant market share in the three areas. He said that ETH could break above its ATH of $4,878 to reach a new high of $7,000.
According to Houghan, Washington’s new approach to crypto would unleash millions of entrepreneurs into crypto, and many of them would build apps on Ethereum and its L2s.
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