The Ethereum network ETH/USD has slashed its transaction fees by 70%, leading to speculation about a potential surge in its price.

What Happened: The Ethereum network’s transaction fee has seen a drastic fall over the week from $23 million to $7.5 million per day. This comes at a time when the blockchain is undergoing major transformations, with two key updates, Pectra and Fusaka, scheduled to roll out in April 2025, according to a report by Cointribune.

The fee reduction is due to a higher gas limit, enabling more transactions to be processed per block. Previous fee reductions in 2021 and mid-2023 triggered a boost in network activity, as evidenced by a rise in active addresses and daily transactions.

The upcoming Pectra update will increase the data blob capacity from three to six, improving the network’s scalability. This change is already reflected in the nearly one million-unit decrease in ETH reserves on exchange platforms over the past ten days.

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Why It Matters: The massive reduction in Ethereum’s gas fees is a significant development, particularly for small and medium enterprises (SMEs) in Europe looking to adopt crypto payments.

In another development on Friday, The Cboe BZX Exchange submitted a proposal to the Securities and Exchange Commission (SEC) seeking permission for staking for the 21Shares Core Ethereum ETF.

On this, Joe Z, co-founder of DeAgentAI, told Benzinga, "If approved, this move could legitimize Ethereum staking within traditional finance, attracting institutional investors by providing a regulated passive income opportunity comparable to dividend stocks or bonds.” Joe Z also stated that this could lead to bridging the gap between decentralized finance and traditional finance.

However, Ethereum continues to grapple with technical challenges. The price of ETH has dipped by 1.1% for the year, in stark contrast to Bitcoin’s BTC/USD 89.6% surge and Solana’s increase of over 68%.

Ethereum will need to capitalize on these technical upgrades and fee reductions to boost network adoption and activity, which could potentially lead to a significant appreciation in price.

• READ MORE: Ethereum Has A Key Strength That XRP, Solana Don’t Have, Expert Says

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.