Ethereum Traffic Didn't Improve After Upgrade

After Bitcoin, Ethereum is one such cryptocurrency that almost every crypto investor always keeps an eye on. After the Ethereum Pectra Upgrade in May 2025, investors were excited about this cryptocurrency which was sluggish for a long time. Crypto users, investors and the crypto community hoped that after this upgrade, the activity on the Ethereum Network would increase. But the data presented in the research paper released recently by JPMorgan is raising big questions on this expectation.

Ethereum Network did not pick up pace despite Pectra Upgrade

According to the report of JPMorgan, despite the recent reforms in Ethereum, there has been no significant jump in the on-chain activity of the network. The report states that even though the Pectra Upgrade is making Ethereum stronger in terms of technology, it has not been successful in attracting institutional investors or large users.

The report also states that the decline in demand for Ethereum may also affect the stability and security of this network in future. This decline is happening especially due to the decrease in interest of institutional investors and weak momentum in Eth futures.

What are the reasons behind the falling demand?

This report, prepared under the leadership of JPMorgan's Global Market Strategist Nikolaos Panigirtzoglou, has identified several reasons behind the falling demand for Ethereum. The most prominent reason is believed to be profit booking from ETH by many investors due to instability in the market. According to the report, along with this, the ongoing regulatory uncertainty on crypto is also contributing to this decline.

Apart from this, the increase in the circulating supply of Ethereum after the Dencun Upgrade last year has made its image of an "inflationary asset", which is creating doubts in the minds of investors.

Another big aspect is the increasing use of Layer 2 Blockchain. While these L2 solutions give Ethereum an edge in scalability and lower fees, they push transactions and volume out of Ethereum’s mainchain. This generates lower gas fees on the network, which can undermine validators’ income and network security.

Positive Indicator: Ethereum Maintains Dominance in TVL

Although the drop in activity is a concern, Ethereum still leads in some key aspects. It continues to dominate in a key indicator, Total Value Locked (TVL). At the time of writing, its TVL was above $60 billion, far higher than Solana and other mainstream chains, according to DefiLlama.