JPMorgan’s latest research reveals that despite multiple recent upgrades to the Ethereum blockchain, including the Pectra update rolled out in early May 2025, the network has not experienced a meaningful increase in core activity metrics. The investment bank’s report points out that neither the daily transaction volume nor the number of active wallet addresses has shown significant growth since these improvements were implemented.
The Pectra upgrade was designed to enhance staking processes, improve wallet features, and boost overall network efficiency, aiming to make Ethereum more attractive to institutional investors and distinguish it from competing platforms. However, JPMorgan notes that these technical enhancements have yet to translate into higher user engagement or transaction throughput.
Interestingly, while total value locked (TVL) on Ethereum saw some increase between the March 2024 Dencun upgrade and the Pectra rollout, this growth appears modest when compared to the rise in the Ethereum token’s market capitalization. The bank attributes this discrepancy partly to increased activity on layer 2 scaling solutions, which reduce fees and transaction load on the main chain but also divert some network activity away from Ethereum’s base layer.
JPMorgan also highlights a decline in average and total transaction fees following the Dencun upgrade, reflecting this shift toward layer 2 chains. Additionally, the circulating supply of ether has increased post-Dencun, raising concerns about Ethereum potentially becoming inflationary amid subdued transaction demand.
From a market perspective, the report indicates that institutional investors have been significant contributors to the recent rally in ether prices, as evidenced by increased long positions in CME futures. However, this institutional interest has not been matched by notable inflows into spot ETH ETFs, suggesting that broader retail investor enthusiasm remains limited.
Overall, JPMorgan’s analysis paints a cautious outlook for Ethereum’s near-term growth prospects. Despite technological progress through upgrades like Pectra, the network’s fundamental usage metrics remain flat, signaling potential challenges in sustaining long-term demand and adoption without further innovation or expansion of use cases.
This assessment underscores the complex dynamics between Ethereum’s technical evolution and market behavior, highlighting that upgrades alone have not yet spurred the expected surge in network activity.
