Ethereum's (CRYPTO: ETH) latest network upgrade, dubbed Pectra, has improved technical efficiencies and attracted greater institutional interest but on-chain activity remains sluggish, according to a new research note from JPMorgan.
The upgrade, rolled out earlier this month, introduced several Ethereum Improvement Proposals (EIPs) targeting enhancements in staking performance, reward mechanisms and transaction processing.
These changes were positioned to make Ethereum more appealing to institutional stakeholders.
JPMorgan analysts, led by Nikolaos Panigirtzoglou, argued that while these developments mark strategic progress, they have yet to drive a substantial uptick in Ethereum's daily transactions or user engagement on the network, The Block reported.
Ethereum's deeper alignment with institutional finance is also reflected in its adoption of token standards such as ERC-3643 and ERC-1400.
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These standards help digital assets conform to compliance demands like KYC and AML checks, positioning Ethereum as more compatible with regulated financial systems, including integration with infrastructure giants like the DTCC.
The analysts compared Ethereum's evolving narrative to Bitcoin's, noting a similar pattern of rising institutional involvement.
Ethereum's CME futures markets reveal growing long interest from institutions, though the relative lack of inflows into spot Ethereum ETFs, especially compared to Bitcoin ETFs, highlights weaker demand from retail investors.
Despite the increased total value locked in ETH terms, dollar-denominated growth has lagged, raising questions about the network's broader utility in the current market.
Meanwhile, Ethereum fees have fallen, partly due to adoption of Layer-2 scaling solutions, and ETH supply has expanded since the Dencun upgrade, leading to inflationary concerns as usage growth lags behind.
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