What is the real driving force behind this round of Ethereum rise?

Author: Haotian

Many people have asked whether the sharp rise in Ethereum $ETH is related to the recent Pectra upgrade? The answer may not be.

The Pectra upgrade is more like the "finishing work" of the Cancun upgrade, mainly some underlying optimizations and detail improvements, rather than breakthrough technological innovations.

From a technical perspective, the four EIPs included in the Pectra upgrade all point in the same direction: to make Ethereum run more stable and efficient. EIP-7044's state expiration standardization, EIP-7524's fuel limit redefinition, EIP-7697's transaction pipeline optimization, and EIP-6789's difficulty adjustment improvements - these are typical "patching" upgrades that solve some marginal problems left after the Cancun 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 magnified into ecological division, and the performance comparison with Solana has been interpreted as a failure of the technical route, and the expansion of many layer2 ecological applications has not been as expected, and the stacking of technical narratives such as Restaking, modularization, and zk cannot be captured by value, etc.;

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

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

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

So, if we must find a logic for this round of Ethereum rise: Ethereum has been over-FUDed and needs to rediscover its existing value, and institutions took the opportunity to buy at the bottom?