Does The Fusaka Upgrade Put A Floor On Ethereum Prices?

The new Fusaka upgrade to Ethereum (Crypto: ETH) seems to be loved by developers who use the world's leading blockchain, and traditional finance, which is increasingly warming up to it.

Crypto currency investors view Fusaka as a strategic milestone for Ethereum. Fidelity Digital Assets calls Fusaka "the most compelling upgrade in years," marking a "strategic and economic turning point" for Ethereum.

VanEck's crypto research said in a note on Oct. 3 that Fusaka's role in scaling Ethereum's ecosystem was "entering its next phase. The Fusaka upgrade…is designed to relieve one of the network's most pressing bottlenecks: data availability for rollups."

Rollups are faster, cheaper "mini-blockchains" built on top of Ethereum. They bundle transactions together and settle them securely on the main blockchain, in this case — the Ethereum blockchain.

Developers like the upgrade, which is an important signal to Ethereum investors. If developers are not happy, investors will sell in favor of the alternatives. 

"Fusaka represents meaningful progress toward Ethereum’s giga-gas future, pushing the gas limit from 45 million to 60 million (units of computation)," said Mo Dong, a computer scientist PhD from the University of Illinois Urbana‑Champaign and current CEO and Co-Founder of Brevis. "As throughput scales, zkVMs (zero knowledge virtual machines) become essential infrastructure," he said. Brevis is a zero-knowledge (ZK) data-proof and computation platform. 

A zero knowledge virtual machine is a computer system that verifies if actions on the system executed a set of instructions correctly. It basically allows developers to take a set of computer codes and prove that the output generated by the codes is correct. 

Justin Drake, a senior researcher at the Ethereum Foundation (EF), the nonprofit that leads much of Ethereum's long-term research and development, recently demonstrated at the ETHProofs Day event that ZK virtual machines can power "a new kind of consensus client on Ethereum."

"Fusaka marks an era of increased focus within Ethereum on improving and expanding Layer 1 capacity," said Felipe Argento, co-founder of Cartesi (Crypto: CTSI).

Ethereum's price has been rising since the upgrade on Wednesday. 

Not The First Upgrade, Not The Last Upgrade

Ethereum's naming scheme, "Fusaka" combines the execution-layer update Osaka and the consensus-layer update Fulu. The upgrade is Ethereum's 17th major network overhaul and the second one of 2025 following the "Pectra" upgrade in May. Investors predicted all-time-highs for Ethereum after Pectra and were rewarded for staying long ETH throughout the summer.

The newest update focuses on scaling and efficiency, a perennial complaint for Web3 developers who use it. It does not change staking rules or the user experience dramatically, but instead boosts the blockchain giant's "backend" capacity. 

According to ConsenSys, Fusaka removes the requirement that every node download all so-called "blob data" via a new Peer Data Availability Sampling (PeerDAS) mechanism. It also raises the block gas limit (to around 60 million gas) while capping per-transaction gas (at around 16.78M) to prevent denial of service cybersecurity attacks. 

Other developer friendly changes include a hardware-signing passkey for wallets and new Ethereum Virtual Machine "opcodes" – the basic command language of Ethereum – to make contracts cheaper. For Ethereum, Fusaka is about giving developers more data power and lower costs in preparation for its rollup-centric future. For developers, it means Ethereum's main chain (Layer 1) will focus on security, data availability, and transaction settlement. While most user activity (decentralized applications, gaming, DeFi) will take place on rollups rather than on Ethereum's base layer. 

Tom Lee: Ethereum "To The Moon"?

Financial analysts see Fusaka – and the broader rollup focus – as a net positive for Ethereum's valuation. 

Fundstrat Global Advisors founder Tom Lee is predicting a big rally next year, a rally he sees doubling Ethereum's price tag from around $3,150 today. 

BitMine Immersion Technologies, (AMEX:BMNR), where Lee serves as Chairman, said in a Nov. 17 press release that their crypto holdings were comprised of 3,559,879 ETH, 192 Bitcoin (Crypto: BTC), and a $37 million stake in Eightco Holdings (NASDAQ:ORBS), a roughly $3 per share fund that seeks to speculate on "moonshot" crypto positions.

Ethereum continues to see tailwinds due in part to the Fusaka upgrade, BitMine said in its press release last month. But that's not the only reason. Their Ethereum bullishness is based on the continued surge in stablecoins and the advancement of tokenization of stocks, bonds and real estate on the Ethereum blockchain.

"I think all the scalability gains we will get with this latest upgrade will make both the layer one and layer two blockchains cheaper," said Argento. "This will also force the rollups that are essentially just cheaper copies of Ethereum L1 to finally differentiate," he said. "The future looks bright."

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Disclosure: The writer of this article owns Ethereum and Bitcoin through the Grayscale Bitcoin Trust, and recently bought Eightco Holdings.

Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.