Ethereum's Doomsday... Tensions Rising Ahead of 'Pectra Upgrade·FOMC'

Ethereum has entered a tense phase ahead of the large-scale upgrade 'Pectra'. After the upgrade, coinciding with the U.S. benchmark interest rate decision, it is expected to face a critical turning point in both market price and market share.

According to CoinMarketCap, a virtual asset market tracking site, the price of Ethereum (ETH) was $1,834 at 4:30 PM on this day. This is approximately a 2% increase from the previous day. The 24-hour trading volume surged by 41.44%, recording about $15.4 billion (approximately 21.5 trillion won).



This is interpreted as reflecting market expectations ahead of the major events scheduled for the day. The Ethereum major upgrade Pectra is expected to be carried out around 7 PM Korean time. The blockchain network upgrade is implemented by pre-setting it to execute at a specific block height, and the approximate timing can be predicted based on the average block generation speed.

The market is tense ahead of this significant upgrade. Especially, there is a cautious atmosphere as consecutive bugs occurred during the upgrade test process, causing the upgrade schedule to be postponed. Maleshi Pie, Chief Research Officer at Ethereum infrastructure developer Consensys, said, "This upgrade is one of the most important parts of the protocol" and "If unexpected issues arise during the upgrade, the trust built by Ethereum through complex hard forks over 10 years could collapse in an instant."

The critical moment is the 15 minutes after the hard fork to confirm that the network does not branch and operates normally. Nixo, an Ethereum core developer, said, "The real moment of tension is the 15 minutes after the hard fork, not before" and "We must closely monitor whether the client splits into the wrong chain."

Domestic exchanges have also started controlling deposits and withdrawals. Upbit blocked ETH and ERC-20 token deposits and withdrawals from 3 PM, and Bithumb from 2 PM, earlier than global exchanges like Coinbase and Binance. The timing for resuming deposits and withdrawals has not been determined. Staking applications for these assets will also be suspended during this period. An Upbit official explained, "This is a decision to more safely prevent potential deposit and withdrawal issues during the hard fork process."

After the Pectra upgrade execution, the Federal Open Market Committee (FOMC) meeting results will be announced. The Federal Reserve will conclude its meeting and decide on the benchmark interest rate. While the market anticipates a rate hold, the prices of ETH and other virtual assets are expected to fluctuate depending on what statements Fed Chair Jerome Powell makes during the press conference immediately following the announcement.

Some suggest that ETH's price volatility might be greater than Bitcoin (BTC). CoinDesk reported, "According to the implied volatility index of the virtual asset volatility derivatives protocol Volmex, BTC's 24-hour price fluctuation is expected to be 2.56%, while ETH is 3.45%."

ETH's price direction is expected to be a test for the possibility of Ethereum's market share recovery. ETH's market share, which once maintained over 10%, has recently plummeted to the 7% range. In contrast, BTC's market share has risen to 65%, setting a four-year high. This was influenced by the BTC spot ETF launch last year and the rapid rise of competing chains like Solana.

Alex Svanevik, CEO of Nansen, said, "Three to four years ago, we might have said ETH would dominate virtual assets, but it's now clear that this is not happening" and "Now, various Layer 1 (L1) chains are competing to become web3 leading platforms. Solana has overtaken Ethereum in most on-chain indicators, including active addresses, transaction volume, and even gas fees."

Reporter Kim Jung-woo

woo@sedaily.com