As one of the most established and popular cryptocurrencies in the market, second only to frontrunner Bitcoin, Ethereum has been constantly in the spotlight for the past years. The altcoin gained attention and recognition thanks to its advanced technology and trailblazing capabilities, which enable a broad range of use cases, from dApps deployment and the creation of non-fungible tokens (NFTs) to enabling financial services.
2024 has been a relatively good year for Ethereum. Highlights include the approval of the first ETH-based exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC) in July, the rise above the $4000 mark in December, and notable improvements in terms of energy efficiency and scalability. Overall, Ethereum has registered gains of over 50% for the year and came closer than ever to its all-time high of $4,891 recorded in November 2021.
However, despite these accomplishments, the crypto continues to lag behind other major market players like Bitcoin, which surged 122%, and Solana, or Doge, with 81% respectively 248% gains in 2024. While other altcoins continued to rise in value, the ETH price seemed to remain stuck in the 3 to 4K range for the better part of the year.
2025 will mark a decade since Ethereum has been around as a dominating presence in the crypto space. So, will Ethereum fare better in this new chapter, or will the altcoin continue its lackluster performance?
Overview of Spot Ethereum ETFs
After the arrival of spot Bitcoin ETFs in January 2024, the surprising debut of spot ETH ETFs offered traders and investors even more opportunities to enhance their exposure to crypto assets. This event was meant to become the catalyst for Ethereum’s growth and propel the asset to new heights. However, despite the optimism and hype triggered by this fortunate development, not much came of it for Ethereum.
While spot BTC ETFs received mostly positive reviews, the same cannot be said about their Ethereum counterparts. Initial predictions estimated that these products would register around $1 billion in monthly inflows, but five months after launch, it became clear that demand for spot Ethereum ETFs was lower than expected.
The newly-launched funds didn’t enjoy the same level of popularity as Bitcoin-based funds, which saw a whopping $17 billion in inflows during the first nine months. Although it can’t be denied that the introduction of spot Ether ETFs represented a major step forward for the second largest crypto, boosting its legitimacy as a viable and trustworthy financial instrument, the impact on the asset’s price and overall performance was rather underwhelming.
If these funds didn’t do much for Ethereum in 2024, it’s highly unlikely they are going to move the needle more in 2025. This is one of the reasons experts are reluctant to make overly positive predictions about the altcoin’s future.
Increased Competition
Another aspect that analysts believe might have a notable influence on Ethereum’s trajectory in 2025 is represented by the new assets coming from behind. So far, several altcoins have been declared noteworthy contenders to Ethereum, with Solana, Cardano, and Algorand being dubbed the Ethereum killer trio. However, despite their undeniable merits, none of these projects managed to outshine or pose a serious threat to the altcoin leader.
The situation could change in 2025 when newcomers might give Ethereum a run for its money. Ethereum is indeed a very powerful blockchain known for being a driver of innovation in the crypto space. As the go-to platform for decentralized applications and NTFs, Ethereum has managed to build an extensive ecosystem of projects powered by its resources.
So far, Ethereum’s advanced features and capabilities have kept it ahead of its competition, but newer blockchains are inching closer as many of them offer better speeds, lower fees, and improved efficiency. For example, Solana is able to process 65,000 transactions per second, while Ethereum’s mainnet can only handle 15 TPS.
Traders and investors are constantly looking for new and promising blockchains that have a bright future ahead of them, and many find that Ethereum is not always the best option. That could pose an issue for the platform, which could see its market dominance decline in the upcoming months.
Correlation with Bitcoin
On a more optimistic note, the relationship between Ethereum and the Bitcoin halving cycle, which is expected to play a key role in Ethereum’s future behavior in 2025, paints a more positive picture. In the past, Ethereum has fallen behind Bitcoin for around eight months following a halving event, but its value eventually soared every time. Some analysts predict that Ethereum will soon start to surpass Bitcoin, maybe reaching a ratio of 0.39 versus BTC, which would imply a 700% rise from current levels, considering we’ve recently passed the eight-month post-halving mark.
Moreover, with over 130,000 new Ethereum wallets created per day in December—the most in over eight months—there has also been a noticeable increase in investor interest in the cryptocurrency. This surge in activity indicates that people are becoming more optimistic about Ethereum’s development prospects. Despite these strong indications, more cautious forecasts from companies such as VanEck put Bitcoin at $180,000 and Ether’s 2025 cycle high at $6,000.
Ethereum’s success in the futures market, which may result in more price hikes, is another factor contributing to its development. By the end of the first quarter of 2025, Ether’s price may be poised to surpass past former highs and go close to new benchmarks as it keeps gaining pace. Ethereum is anticipated to be a major player in the next cycle of the cryptocurrency market due to growing interest from both institutional and individual investors.
All in all, 2025 promises to be a very interesting year for Ethereum and the crypto market as a whole, so make sure you stay updated with the latest trends and events in case you want to get into crypto trading or investing.
