Ethereum's Pectra Upgrade Drives $785M Crypto Inflows

Coin WorldMonday, May 19, 2025 8:49 am ET
2min read

Crypto inflows surged to $785 million last week, marking the fifth consecutive week of positive flows and pushing year-to-date totals to $7.5 billion. This significant inflow represents a full recovery from the outflows experienced between February and March. The surge in inflows was driven by a combination of factors, with Ethereum standing out as a key contributor to the positive sentiment.

Ethereum's Pectra upgrade, which went live on May 7, was a major catalyst for the increased inflows. The upgrade, which was the network's biggest change since the 2022 Merge upgrade, introduced several key improvements. EIP-7251 lifted the validator cap to 2,048 ETH, while EIP-7702 brought smart-wallet functionality and a significant step toward account abstraction. These enhancements have bolstered investor confidence in Ethereum's future prospects.

In addition to the technical upgrades, the appointment of Tomasz Stańczak as the new co-executive Director of the Ethereum Foundation further boosted investor optimism. Stańczak, who has a deep history in Ethereum's core development, has been focusing on statelessness to enhance the network's scalability and decentralization. His leadership is expected to shift the focus back to statelessness, which had been deprioritized due to its complexity and the emphasis on rollups.

The positive sentiment surrounding Ethereum was reflected in the inflows, which reached $205 million for the week, a notable increase from the previous week's $1.5 million. This surge in inflows indicates renewed investor optimism following the successful Pectra upgrade and the appointment of new leadership.

While Ethereum was the standout performer, Bitcoin also saw significant inflows, although slightly lower than the previous week. According to CoinShares' researcher, the retraction in Bitcoin inflows was likely due to continued hawkish signals from the US Federal Reserve. Despite this, short-bitcoin products saw a fourth consecutive week of inflows, totaling $5.8 million, reflecting investor positioning amid recent price gains.

The US led the positive flows, with $681 million in inflows, surpassing Germany and China Hong Kong with $86.3 million and $24.2 million, respectively. This indicates that despite global economic uncertainties, investors in the US remain bullish on digital assets.

In contrast, Solana bucked the trend with up to $0.89 million in crypto outflows. This aligns with a recent trend of declining total value locked (TVL), which has plunged by 64%. The outflows from Solana highlight the volatility and risk associated with investing in altcoins, even as Ethereum and other digital assets continue to attract significant inflows.

Overall, the surge in crypto inflows to $785 million last week reflects a renewed optimism in the digital asset market, driven by technical upgrades and leadership changes in Ethereum. As the market continues to evolve, investors are likely to remain focused on the potential for further innovation and growth in the crypto space.