Article reprinted from: MarsBit
Original title: (Why Ethereum maxis say ETH will be the ‘comeback kid’ of 2025)
Written by: Tom Mitchelhill
Compiled by: Daisy, Mars Finance
Analysts and experts say that AI agents, a series of important network upgrades, and improvements in the U.S. regulatory environment are all reasons why Ethereum fans are looking forward to 2025.
Ethereum supporters say that AI agents, major network upgrades, increased institutional interest, and the comprehensive regulatory reforms brought by the crypto-friendly government of new U.S. President Donald Trump are all reasons to look forward to 2025.
Infinex founder Kain Warwick stated in an interview with Cointelegraph that although Ethereum may perform slightly flat in 2024, this asset is like a 'compressed spring' that is ready for a breakout in 2025.
According to TradingView data, as of now, ETH (Ethereum) has risen 53.5% year-to-date, increasing from $2,350 on January 1 to the current $3,478.
ETH has posted a year-to-date gain of 53.5%. Source: TradingView
Meanwhile, other major crypto assets, including Solana, Cardano, and Ripple's XRP, have risen 92.7%, 57%, and 276.5%, respectively, so far this year.
The longer you compress it, the harder it rebounds. There are many favorable factors, as well as some constraints, but once it breaks through, people will say 'Oh my God,'” said Warwick.
Source: Kain Warwick
He mentioned some Ethereum Improvement Proposals (EIPs) and the improvements in user experience brought by these upgrades, viewing these as key turning points for Ethereum and ETH price trends.
In 2025, I believe we will see improvements in account abstraction, significant progress in L2 interoperability, and a substantial enhancement in user experience between L2s.
Ethereum will welcome the Pectra upgrade in 2025
One of the major upgrades that Warwick and other Ethereum supporters are eagerly anticipating is the Pectra upgrade - the next significant milestone on Ethereum's roadmap, expected to launch in early 2025.
Gaia Regis, co-founder and CEO of the restaking platform Byzantine, stated that the Pectra upgrade will fundamentally change how the Ethereum security layer operates.
Currently, Ethereum staking primarily relies on liquidity. Essentially, many ETH holders want to participate in staking. This is usually a good thing, as more nodes mean more decentralization and higher security,” she said.
However, Regis stated that Ethereum has now reached enormous scale—communication among over one million Ethereum validators—which is beginning to slow the speed of the network.
Pectra addresses this issue by increasing the maximum effective balance of validators from 32 ETH to 2,048 ETH, significantly reducing the number of required validators and easing the pressure on the network,” said Regis.
Reduced pressure means a faster network, which will lead to a better experience for Ethereum users.
In September of this year, Ethereum core developers decided to split the Pectra upgrade into two main packages. The first Pectra package will introduce a total of eight EIPs, the most important of which is EIP-7702, aimed at improving the user experience of wallets and chain abstraction.
This will make staking cheaper, leading to more participation in staking, which will gradually reduce staking rewards over time. For this reason, we are extremely optimistic about restaking. Many people will wish to increase their staking rewards by securing other networks.
Trump's crypto-friendly SEC will be particularly beneficial for ETH
Saul Rejwan, managing partner at crypto venture capital firm Masterkey, stated in an interview with Cointelegraph that Ethereum and more 'legitimate' projects in the crypto industry, particularly decentralized finance (DeFi) and decentralized physical infrastructure (DePIN), will benefit the most under the Trump administration and a more crypto-friendly U.S. Securities and Exchange Commission (SEC).
On December 4, Trump nominated pro-crypto businessman and former SEC commissioner Paul Atkins to be the next SEC chairman, while current chairman Gary Gensler plans to resign on January 20.
In a more favorable regulatory environment, DeFi projects on Ethereum will thrive, and areas like restaking just need a little regulatory push to attract institutional investors,” he said.
We expect this new leadership to lower barriers to entry, making it easier for early crypto entrepreneurs and resilient companies to innovate and succeed.
Stablecoins, tokenization, and AI agents
Matt Houghan, Chief Investment Officer of Bitwise, stated that Ethereum enters 2025 with three major advantages and expects this asset to experience a surge in the new year.
Ethereum is at the center of the three biggest trends in the crypto industry: the rise of stablecoins, tokenization, and AI agents. It dominates market share in all three areas,” said Houghan.
He added, 'I believe that the excitement in these three areas next year will influence Ethereum, making it the comeback kid of 2025. You can already see this in the recent strong performance and ETF inflows.'
In the past two weeks, net inflows into Ethereum ETFs have reached $1.5 billion, marking one of the largest periods of inflows among eight spot funds, according to data from Farside Investors.
Ethereum ETFs have witnessed over $1.5 billion in net inflows in the last two trading weeks. Source: Farside Investors
Like Rejwan, Houghan also believes that the new crypto-friendly SEC under Trump is particularly beneficial for Ethereum.
I am looking forward to lifting the 'Sword of Damocles' that has been hanging over the U.S. crypto industry for the past four years. Washington's new approach will unleash millions of crypto entrepreneurs, many of whom will build killer applications on Ethereum and its Layer 2 networks,” said Houghan.
We are entering the golden age of crypto, and Ethereum will be one of the major beneficiaries of this flourishing.
Houghan stated that, overall, Bitwise expects ETH to break through its previous all-time high of $4,878, reaching what he describes as a 'conservative' projected new high of $7,000.
More Layer 2 networks, restaking, and better DApps
Ethereum supporter and Chief Marketing Officer of crypto company Keyrock, Edu Timmers believes that with the launch of new Layer 2 networks such as Abstract and Deutsche Bank's project, the widespread application of the Ethereum ecosystem will be enhanced.
Timmers also mentioned the rise of the on-chain perpetual contract protocol Hyperliquid, built on Arbitrum, as proof of Ethereum's growing dominance on-chain, and he expects Ethereum and its decentralized applications (DApps) ecosystem to start competing with centralized market leaders like Binance in the new year.
Projects like Hyperliquid will start competing with centralized players like Binance in 2025, rather than decentralized projects like Uniswap,” said Timmers.
Additionally, Timmers stated that Ethereum restaking is another undervalued area worth paying attention to in 2025, claiming it will make the network more robust and versatile.
As chains begin to transfer security to the Ethereum mainnet through solutions like EigenLayer, restaking may have a breakthrough.
