Investors poured $200 million into Ethereum-focused investment products last week, signaling renewed confidence following the network’s successful Pectra upgrade. This marks the largest weekly inflow since February 2025, according to data from digital asset manager CoinShares.
The surge comes as Ethereum’s latest upgrade addresses long-standing scalability and usability challenges. Pectra, which combines execution layer Prague and consensus layer Electra updates, went live on May 7 after overcoming testnet hurdles that delayed its original 2024 timeline.
Market analysts attribute this capital inflow to Pectra’s enhanced staking mechanics and improved account functionality. Ethereum’s price has remained stable between $3,800-$4,200 during the upgrade implementation, with derivatives data showing increased institutional interest in long-term positions.
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Pectra Upgrade: Technical Breakthroughs
The upgrade introduces 11 Ethereum Improvement Proposals (EIPs) that fundamentally change network operations:
- EIP-7251: Increases validator staking limit from 32 ETH to 2,048 ETH
- EIP-7702: Enables temporary smart contract functionality for standard wallets
- EIP-2537: Adds BLS precompiles for enhanced cryptographic operations
These changes reduce operational complexity for institutional validators while improving transaction flexibility for retail users. As noted in Ledger’s technical analysis, the upgrade maintains Ethereum’s security parameters while boosting processing capacity by 18%.
Validator Ecosystem Transformation
Pectra’s increased staking limit allows large institutional players to consolidate validator operations. Galaxy Digital reports this could reduce node infrastructure costs by 40% for enterprise-scale staking providers.
The changes come as:
- Total staked ETH reaches 31.4 million (26% of supply)
- Staking yield stabilizes at 3.2% APR
- Queue times for new validators drop to 2 days
Kraken’s staking platform saw a 22% increase in ETH deposits within 72 hours of the upgrade, suggesting institutions are repositioning for more efficient capital deployment.
Account Abstraction Advances
EIP-7702’s temporary smart contract capabilities enable new use cases:
- Recoverable wallet addresses
- Batch transaction processing
- Automated recurring payments
This evolution bridges the gap between traditional wallets and smart accounts, potentially onboarding 14 million new users according to QuickNode’s developer survey. Wallet providers like MetaMask are already testing one-click DeFi interactions using these new capabilities.
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Market Impact and Outlook
The $200 million inflow positions Ethereum products as the week’s top performers, outpacing Bitcoin fund flows by 3:1. Derivatives markets show:
- 25% increase in ETH call options
- Open interest reaching $9.2 billion
- Funding rates stabilizing at 0.008%
With Pectra’s technical improvements now operational, analysts predict increased developer activity could drive Ethereum’s network revenue above $5 billion annually by Q4 2025. The upgrade’s successful implementation reinforces Ethereum’s position as the leading platform for smart contract innovation.
