Author: Anderson Sima, Foresight News
From the beginning of 2024 to now, if many cryptocurrency believers were to list the most disappointing cryptocurrency assets, there is no doubt that Ethereum would top the list.
In the last cycle, Ethereum, which shone brightly with new applications such as DeFi and NFTs, once reached a historical high of $4,800, creating a wealth code with a growth of over 20 times. When Bitcoin galloped ahead, people's expectations for the second dragon were also at their peak.
However, in this new cycle, while Bitcoin has broken through $90,000, Ethereum is barely holding above the $3,000 mark. Even after a brief spike to $4,000 at the beginning of the year, it once fell to around $2,200, trapping many cryptocurrency believers who were eagerly anticipating Ethereum; even the usually profitable 'Brother Sun' was among them, showing that institutional investors are also not immune. Currently, the exchange rate of Ethereum to Bitcoin has dropped to a historical low of 0.034.
As the saying goes, 'When the mountains are heavy and the waters are blocked, there seems to be no way, but when the willows are dark and the flowers are bright, there is another village.'
I believe that the predicament faced by Ethereum is an inevitable stage in the early development of the Web3 industry. When Bitcoin occupies the consensus high ground in the field of digital gold, Ethereum's vision of a world computer encounters some structural contradictions, so it has failed to resonate with its market value, and its value expectations cannot be realized in the short term. However, I believe that all current difficulties are essentially paper tigers, and we are at 'the dawn'.
The predicament of Ethereum
The essential difference between this round of the cryptocurrency bull market and the previous two rounds is that Ethereum has not led the wave of technological innovation. Compared to the ICO frenzy of 2017 and the DeFi Summer of 2020, the biggest hot topic in this cycle is Memes, with most Meme communities on Solana; the Layer2 and Restaking concepts led by Ethereum have even had some negative impacts on the Ethereum ecosystem.
Currently, although hundreds of Layer2 ecosystems have improved Ethereum's trading experience and performance, they have also brought serious drainage issues; the reduced fees after the upgrade have also affected Ethereum's economic model and staking income. When ETH demand decreases, and the burn rate does not meet expectations, inflationary conditions begin to appear, which also undermines its value storage potential; at the same time, Bitcoin has an irreplaceable appeal to institutional investors in the field of value storage, and this year's launch of Ethereum’s spot ETH has become a rather inconsequential presence.
On the other hand, Vitalik Buterin, as the community leader, has a rational temperament that deeply influences the entire ecosystem. Vitalik has a very grand vision for the future development of Ethereum, and recently he has written several lengthy articles researching various aspects of achieving decentralization, security, and scalability for Ethereum.
However, from the community's perspective, some of these goals are overly idealistic and significantly diverge from the current technological limitations and market expectations. At the same time, Vitalik has too much influence in Ethereum's community governance and decision-making, which contradicts the ideal of decentralization and may lead to a decision-making process that is not sufficiently democratic and decentralized. The voices of the community are intentionally or unintentionally ignored, making him appear particularly out of touch with the pursuit of wealth codes compared to everyone else.
But isn't this Vitalik? The boy who cried tears when Blizzard weakened the Warlock's skills, and in a fit of rage entered the blockchain world to establish Ethereum. If Vitalik becomes the New Money who keeps shouting for orders and is intoxicated by wealth, then perhaps that is the crisis the Ethereum community needs to worry about FUD.
The dawn
Although the rise of Meme culture and Solana has attracted a lot of attention in this cycle, it does not mean that Ethereum has not played a role in technological innovation. Although Layer2 and Restaking may have brought some challenges in the short term, in the long run, they provide a foundation for the sustainable development of the Ethereum ecosystem: by reducing transaction costs and increasing transaction speed, Layer2 solutions make Ethereum more suitable for large-scale applications, which is crucial for attracting more users and developers. The staking mechanism encourages ETH holders to participate in the maintenance of the network, enhancing the decentralization and security of the network.
Regarding concerns about the decline in ETH demand and inflation status, the Ethereum community and developers are actively seeking solutions: the community is discussing further adjustments to EIP-1559 to optimize the burning and issuance mechanisms of ETH.
At the same time, although Bitcoin is attractive to institutional investors in terms of value storage, Ethereum offers a more comprehensive ecosystem that includes smart contracts, DeFi, NFTs, etc. Ethereum and Bitcoin are complementary in many ways, rather than simply competitive. The versatility of Ethereum gives it a unique position in the cryptocurrency space, supporting a wider range of application scenarios. This is something that no other public chain can compare to; the so-called 'Ethereum killers' stem from problems within Ethereum itself, rather than other public chains being able to replace it.
Ethereum's hope lies in its continuous technological advancement, a strong developer community, and its adaptability to the demands of emerging markets. However, in this cycle, Ethereum needs to focus on commercially viable applications that can be implemented in the real world while emphasizing long-term sustainable development, allowing each commercial application to become a step toward long-termism.
Ten thousand dollars is not a dream
I dare to predict that before the mid-term elections in 2026, Ethereum is expected to break through $10,000. Standard Chartered Bank analyst Kendrick reiterated Standard Chartered's price target by the end of 2025, which is $200,000 for Bitcoin and $10,000 for Ethereum.
With the changes in the political landscape of the United States and Trump's support for the cryptocurrency market, a large amount of traditional capital is flowing into the cryptocurrency field. When traditional funds genuinely enter the crypto market, Ethereum, as a mainstream crypto asset with a spot ETF, is likely to attract more capital attention.
According to Farside Investors data, on November 12, the net inflow of the US Ethereum spot ETF reached $134.4 million, creating the best historical data.
The launch of the Ethereum spot ETF provides significant financial support for the growth of Ethereum prices. ETF investors in traditional markets are usually long-term investors, and the liquidity of spot ETFs has increased the market's demand for Ethereum. For traditional investors who already hold Bitcoin, Ethereum, with its innovative potential and ecosystem effects, is also one of the best pathways for them to enter the cryptocurrency market, which will further accelerate Ethereum's journey to becoming a mainstream investment tool.
As for the Layer2 drainage issue, as the experience of the Ethereum mainnet gradually improves and competition settles down, we may see more L2 solutions integrated into Ethereum's mainnet. The smooth progress of this process will provide stronger traffic support and gas fee income for Ethereum, alleviating inflation pressure and making the economic model of the Ethereum network more robust.
It is expected that in the first half of 2025, the integration progress of Ethereum's L2 will gradually enter a substantial implementation phase, where some Layer2 will be eliminated, and L2 integration will attract more developers and users back to the mainnet, thereby promoting the prosperity of Ethereum's ecosystem. During this phase, prices are expected to stabilize in the range of $3,000 to $5,000.
In the coming years, innovative applications such as PayFi and RWA are expected to continue to grow, especially after improvements in smart contract functionality and the gradual perfection of L2 solutions; more high-complexity financial applications will emerge. The birth of these applications is expected to reignite market demand for Ethereum.
For example, the integration of cross-chain liquidity based on L2 and the maturation of on-chain financial derivatives markets will bring a large volume of transactions, further enhancing the value of Ethereum. The interaction of RWA and payments with traditional assets are both potential application killers. It is expected that by the second half of 2025, these emerging applications will drive the value of Ethereum to break through $6,000 to $8,000.
At the same time, as influential figures in the US like Trump support cryptocurrencies, it is expected that the US cryptocurrency market will gradually welcome a more relaxed regulatory environment. Additionally, the global economic slowdown and the risks of fiat currency inflation will cause more investors to consider digital assets as a hedging tool, further increasing the demand for the cryptocurrency market.
If the US and other major economies gradually relax their regulation of cryptocurrencies in the next 1-2 years, and global investors increase their demand to combat inflation and fiat currency depreciation, this will provide strong macro support for the rise in Ethereum prices. It is expected that in early 2026, under favorable market conditions, Ethereum may experience a large-scale price breakout, thus reaching the $10,000 mark.
Recently, Vitalik was interviewed by Foresight News, where he mentioned a statement: 'The only surprise is that if no one knows Ethereum as an asset, it cannot succeed, so from this perspective, Ethereum cannot completely become a background presence.' The ambitions of Ethereum are known to some.
