What is the real driving force behind Ethereum’s rise in this round?

Author: Haotian

This sharp rise in Ethereum $ETH has led many people to look back and ask if it will be related to the recent Pectra upgrade?The answer may not be.

The Pectra upgrade is more like the “final work” of Cancun’s upgrade, mainly some underlying optimizations and details improvements, rather than breakthrough technological innovations.

From a technical perspective, the four EIPs included in the Pectra upgrade all point in the same direction: making Ethereum run more stable and efficient.The status of EIP-7044 expired standardization, the fuel limit redefinition of EIP-7524, the trading pipeline optimization of EIP-7697, and the difficulty adjustment and improvement of EIP-6789 – these are typical “repair and repair” upgrades, solving some edge problems left by Cancun’s upgrade.

The logic that really determines the price trend of Ethereum this time is actually the “value repair” after excessive FUD.

In the past few months, Ethereum has indeed experienced a round of “concentrated firepower”-like doubts: layer2 liquidity dispersion has been amplified into ecological division, performance comparison with Solana has been interpreted as a failure in the technical route, and the expansion of many layer2 ecological applications has been lower than expected, technology narrative stacks such as Restaking, modularization, and zk cannot be captured by value, etc.;

When all the focus is on the issue of Ethereum, some key facts are ignored: the total locked DeFi value is still stable at $119B, the Cancun upgrade has indeed greatly reduced the cost of layer2, the inflow of ETF funds continues to increase, and new narratives such as RWA and PayFi are also mainly developed in the Ethereum ecosystem.

The fundamentals of Big Ether are not as bad as market sentiment reflects.

And institutional investors obviously see through this emotional imbalance.The most typical example is Abraxas Capital’s huge purchase of 242,652 ETH (approximately $561 million).Moreover, from May 9 to 14, large-scale ETH transfers (>$1M) also increased significantly, and the ETH balance of institutional wallet addresses increased significantly, which all indicate that it is planned large-scale institutional position building behavior.

Therefore, if we have to find a logic for this round of Ethereum rise: Ethereum has been over-the-top by FUD, we need to rediscover the existing value, and institutions take the opportunity to buy the bottom first?

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