Ethereum’s “Pectra” upgrade, explained

There’s never a dull moment on the blockchain. Here’s what you need to know this week:

Bitcoin reapproached $100K. Also, crypto ETF inflows picked up and New Hampshire became the first state to approve a crypto reserve.

Ethereum completed its “Pectra” upgrade. What the update means for ETH and the future of the network.

DOGE developers raised $6.9M for consumer apps. Plus, more stats from around the cryptoverse.

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MARKET BYTES

Crypto markets rise on news of U.S.-China trade talks

For the last three weeks crypto markets have been remarkably steady, with BTC generally hovering around $94,000 and ETH around $1,800. As of Tuesday, things were so stable that the crypto “fear and greed” index was pinned exactly in the middle, in “neutral” territory.

On Wednesday morning, however, markets got a boost following reports that U.S. and China trade representatives are set to meet this week. BTC briefly rose past $97,000, and according to Bloomberg, options markets were showing optimism, with many traders betting that BTC could rise to $100,000.

Traders were also watching the Federal Reserve’s meeting. As expected, the central bank held rates at current levels, with Fed officials taking a wait-and-see approach to the Trump administration’s tariff strategy and its impact on the U.S. economy.

“My gut tells me that uncertainty for the path of the economy is extremely elevated and the risks of higher unemployment and higher inflation have risen,” Fed Chair Jerome Powell said. “But they haven’t materialized in the data yet, and that tells me that the right thing to do is to … await further clarity.”

Here are three more stories you should know about…

Crypto ETFs continued to rally

Traders have been flocking to crypto investment products in a major way over the last few weeks, adding $2 billion in total inflows last week, according to the latest CoinShares report.

While BTC ETFs were the biggest beneficiary (with $1.8 billion in new capital last week), ether ETFs have also been on a solid run, with a two-week total of $336 million in inflows.

Meanwhile, the SEC once again delayed making a decision on whether or not to approve a spot ETF for Litecoin (LTC) this week, announcing that the deadline would be postponed to allow time for public comment. Earlier this year, Bloomberg analysts suggested that LTC could be the next cryptocurrency to gain spot ETF approval.

High tide… As CoinShares noted, the recent crypto ETF rally marks a “dramatic shift in sentiment following nine weeks of significant outflows,” with total inflows over the past three weeks totalling $5.5 billion.

New Hampshire becomes first state to pass crypto reserve law

The “Live Free or Die” state on Tuesday became the first in the U.S. to allow investment of public funds into crypto assets, with Governor Kelly Ayotte signing a new crypto reserve bill into law.

The legislation allows the state to invest up to 5% of public funds in crypto assets that have a minimum of $500 billion in market capitalization (only bitcoin qualifies currently).

“New Hampshire is once again First in The Nation!” wrote Ayotte on X. As of this week, 36 BTC reserve bills are still being considered across 19 states.

State of affairs… New Hampshire’s move represents a reversal of fortune for state crypto efforts so far this year — at least seven states, including Arizona, Utah, and Florida, have failed to get similar crypto-stockpile laws past the finish line. But as crypto reserve advocate Dennis Porter told CoinDesk, “The first one’s the hardest, by far. Having a state that’s already gotten it done, it’ll really increase the political momentum.”

Sam Altman-backed Worldcoin rolls out in U.S.

One of the most interesting, hotly debated, and straight-up sci-fi tokens in recent years has been Worldcoin, the native cryptocurrency of World, a project backed by OpenAI CEO Sam Altman.

World uses an Ethereum-based blockchain and eyeball scans to create an immutable proof of humanity online — which the founders believe is necessary in a world of increasingly powerful AI. This week it officially launched in the U.S., with the token trading on major exchanges, including Coinbase.

The company’s eyeball-scanning orbs are also available in locations across the country. Users receive WLD tokens in exchange for scanning their eyes and connecting the data to the World network.

Around the world… According to World, around 12 million people from 100 nations have participated in the project so far. A WLD Visa debit card is expected to launch later this year.

CHAIN REACTION

What does the “Pectra” upgrade mean for ETH?

It’s been a tough year for Ethereum. The second largest cryptocurrency is down 45% since the start of 2025, and there’s been much debate over whether the Ethereum developer community — including prominent ETH co-founder Vitalik Buterin — has been doing enough to ensure the network’s success.

But there are signs of hope, starting with the blockchain’s “Pectra” upgrade, which went live Wednesday. What could it mean for ETH? Here’s what you need to know.

What is the Pectra upgrade?

Pectra is the biggest network upgrade since last year’s Dencun update, which launched in March 2024, and the third major upgrade since Ethereum officially transitioned to a proof-of-stake network in 2022.

Pectra, which is part of ETH’s years-long product roadmap, is focused mostly on reducing transaction fees (gas), speeding up transaction processing, and improving the blockchain’s data storage capabilities.

Why is Pectra important?

Pectra has been called “the most ambitious Ethereum upgrade yet,” with the upgrade featuring more formal improvements (11) than any other network upgrade to date.

And its rollout comes at a critical time, with Ethereum facing stiff competition from newer competitors like Solana and Sui. The Ethereum ecosystem is also navigating the growth of layer-2 networks (like Base, Optimism, and Arbitrum) that are built on top of the Ethereum network and designed to help ETH handle more traffic.

Given that L2s have been capturing an increasing share of ETH’s network activity and fees, one major focus of Pectra is boosting Ethereum’s ability to support L2 transactions and increasing network efficiency, which could see more revenue flow to the main Ethereum network over the long term.

What improvements will be launched?

The Pectra upgrade touches all aspects of ETH, with improvements relating to the user experience, staking, and network scalability.

Among the most direct improvements for users is flexible fee payments. Currently, Ethereum users must pay transaction fees in ETH. Upon Pectra’s launch, though, gas can be paid in other Ethereum-compatible tokens, including stablecoins like USDC and even memecoins.

Onchain apps and accounts will also be able to “sponsor” gas fees for users, potentially making it cheaper (or even free) to use them.

Ethereum-compatible wallets will also get new capabilities, including batched transactions (which can reduce fees and network congestion) and smart contract compatibility (which will allow for new kinds of automated transactions).

And validators who stake their ETH will see the maximum stakeable amount rise to 2,048 ETH, up from 32 ETH, allowing them to compound their staking rewards.

What could Pectra mean for ETH’s price?

Major network upgrades don’t necessarily lead to short-term spikes for ETH. After the Merge upgrade in 2022, ETH’s price fell by around 13% a month later. A month after last year’s Dencun upgrade, ETH was down 15%.

Currently, analysts have mixed views about how the Pectra upgrade might impact ETH’s price.

Gabriel Halm, a research analyst at IntoTheBlock, believes Pectra could be a catalyst for ETH's price to break above the $2,000 level in May, in part due to a potential surge in user demand.

Parataxis Capital cofounder Edward Chin is less certain. “It’s a welcome software upgrade that will improve the efficiency and utility of the network, but alone not likely to drive Ethereum’s price meaningfully higher,” Chin told Bloomberg. “Ethereum needs to find a way to drive further adoption and a reason for investors and users of the network to hold its token.”

What’s next for ETH?

Given ETH’s price struggles and criticism from investors and developers alike, the Ethereum Foundation has begun moving with more urgency in recent months.

Co-founder Vitalik Buterin said in a new blog post that ETH has become too complex. His new goal is to make Ethereum as simple as Bitcoin. “Even a smart high school student is capable of fully wrapping their head around and understanding the Bitcoin protocol,” he wrote.

Josh Rudolf, the Ethereum Foundation member in charge of ETH’s roadmap, posted on X last month that ETH’s simplified roadmap will focus on scaling and improving the user experience. “It's all things we can ship in significant ways over the next ~12 months,” Rudolf said.

Learn more about Pectra

NUMBERS TO KNOW

$330 billion

The amount in BTC that Bernstein analysts predict corporations will add to their treasuries by 2029. The investment firm anticipates Strategy — the top corporate bitcoin holder with 555,450 BTC, worth about $52 billion — will continue to lead the way, with smaller firms following suit and increasingly diversifying into crypto.

$6.9 million

Amount that DOGE developers raised in a new funding round to “build a wide range of consumer apps — from gaming to artificial intelligence.” DogeOS, which calls itself the application layer for Dogecoin, aims to make the meme-themed chain competitive with smart contract networks such as Ethereum while “unlocking native DOGE yield and DeFi opportunities.”

52.4%

Percent of the Bitcoin mining industry’s energy use that is powered by sustainable sources, up from 37.6% in 2022, according to a new Cambridge University study. The Block notes that the new data “exceeds Elon Musk’s stated threshold of 50% for Tesla to resume allowing bitcoin payment options,” though the electric carmaker has yet to comment on such plans since pausing BTC payments in 2021.