Potential Challenges for Ether in 2025
Ether may not deliver strong price rallies in 2025, according to 10x Research.
Reasons Behind the Prediction
Markus Thielen, head of research at 10x Research, believes Ether might not be the best investment choice for a 2025 bull run. Thielen thinks Ether may not perform as well as Bitcoin due to several factors.
Key Metrics to Watch in 2025
One of the key metrics to watch in 2025 is the trend in active validators on the Ethereum network. The growth rate of validators has turned negative, raising concerns about the increasing risk of more validators exiting the network.
Potential Risks for Ether
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Thielen notes that Ethereum lacks “real demand” outside of staking, which means that a rise in unstaking seems “logical.” This could lead to a decrease in Ether’s price.
Contrasting Views
Other analysts, such as Attestant’s chief business officer, Tim Lowe, disagree with Thielen’s assessment. Lowe believes that demand for Ether can increase with refined marketing and a unified value proposition.
Historical Performance
Ether underperformed against Bitcoin in 2024, with a 46.3% return compared to Bitcoin’s 121.4% return over the same period.
Potential Catalysts for Growth
Lowe sees diversification from Bitcoin as a simple catalyst for Ethereum’s growth.
Bitcoin and Ether ETFs in the United States
Bitcoin exchange-traded funds (ETFs) launched on January 11, 2024, and saw a significant surge in demand, helping to push the price of Bitcoin to new highs within two months. This strong demand led to a substantial increase in the price of Bitcoin. The launch of these ETFs triggered a significant increase in investor interest in Bitcoin.
Comparison of Bitcoin and Ether ETFs
In contrast to Bitcoin ETFs, which saw $35.3 billion in inflows across the year, Ether ETFs reached $2.66 billion. This large difference in investment inflows suggests that investors were more interested in Bitcoin than Ether.
Upgrades to the Ethereum Network
The Duncan upgrade in March, which aimed to reduce the network’s gas fees and increase its transaction capacity, came six months too late, missing the peak of the memecoin rally. The market had already shifted to more cost-effective alternatives, such as Solana. Thielen is also skeptical of the upcoming Pectra upgrade.
